MERGERS, ACQUISITIONS AND FINANCIAL RESULTS

Uganda’s Mbire Sells 50 Percent of Nilecom to South Africa Firm

The Celcom Group, a South African telecom company, has acquired a 50.5% stake in Nilecom, one of MTN's exclusive dealers in Uganda. Nilecom is owned by Charles Mbire, a city businessman and chairman of MTN Uganda.

Sources said the Johannesburg Stock Exchange-listed group did a due diligence on Nilecom "and were very satisfied with the company."

Nilecom will now trade as Celcom Uganda. Nilecom said in a statement that Celcom would have the option to buy another 15% in 2009. "But the remaining shareholding will stay with Nilecom current shareholders," the statement said.

Celcom is the leading distributor for MTN in South Africa and in Nigeria. The group is also involved in other ventures like fleet management. The statement said the acquisition would enable Celcom establish a presence in the fast-growing Ugandan cell phone market. Uganda has 4.7m cell phone subscribers for a population of 30m people.

A source said Celcom would use Uganda as a springboard to expand to Africa.

"Our key focus for the year remains consolidating and strengthening our existing operations." However, the Nilecom transaction represents an important opportunity to establish the right partnerships at the right time to exploit the emerging cell phone markets in Africa and so help secure future growth," Stefano Brachini, the Celcom chief executive, said.

"The transaction will establish a retail footprint and subscriber-base opportunities for the Celcom Group in Uganda and open the opportunity for cross-selling into the Ugandan market of products and services from our other group companies like VPS and Triple Play."

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