May 25, 2006

Rumors are flying that China Mobile Communications, the world’s largest wireless carrier, may be on the brink of acquiring Luxembourg-based Millicom International Cellular SA.

Some observers even say it may already have bought the company.

Several newspapers reported earlier this week that the two companies were close to a $4 billion deal, but China Mobile representatives subsequently denied that the company had even put in a bid on Millicom.

Then, The Wall Street Journal reported Wednesday that the deal was close and gave it a value of $5.3 billion, citing “people familiar with the situation.”

The purchase would be the largest overseas acquisition by any Chinese company, according to the Journal.

A spokesperson for China Mobile told the newspaper that “the talks are still going on.”

But The Standard newspaper was told by an anonymous source that China Mobile already had been successful in its bid, after the highest bidder, Beirut-based Investcom, dropped out.

According to Millicom’s most recent quarterly report, the company has more than 10 million subscribers. Millicom operates primarily in developing countries in Asia, Central America and Africa.

China Mobile last year failed in a bid to acquire a 26-percent stake in Pakistan Telecommunications Co.

Source: RCR