February 2008
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RCom acquires African firm for $500 mn

Anil Ambani group company Reliance Communications is understood to have acquired an African company for close to $500 million (over Rs 2,000 crore), through which it plans to offer telecom access services in Uganda.

This is the third global acquisition for the company after FLAG in 2003 and Yipes in 2007, and first international acquisition as far as services are concerned.

According to industry sources, the acquisition agreement is believed to have been agreed upon late last evening in London and the total deal size is likely to be higher than the $211 million for FLAG and $300 million for Yipes.

Formalities of completing the acquisition are expected to be completed during the day.

Reliance has recently been allowed to offer GSM technology based mobile services in India along with its existing CDMA operations through out the country.

Reliance Communications Officials when contacted declined to offer any comment on the development. However, yesterday the company had indicated it is open to evaluate inorganic growth opportunities in emerging markets like Asia and Africa.

The move comes a day after the announcement of formation of Reliance Globalcom, the umbrella brand for all its international businesses.

Earlier, RCom Chairman Anil Ambani had said the company would be investing over $6 billion in capex next fiscal. Merchant banking sources indicate that around 35 per cent of this amount would go in expanding the global business, around $200 million in expanding the footprint of ethernet services and $300 million in data centres.

Source: Economic Times

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