South Korea’s KT Corp is in talks to acquire a 20 percent stake in Telkom, South Africa’s largest fixed-line operator and fourth-largest mobile player.

Telkom confirmed in a statement this morning that it was exploring a "Potential Strategic Venture" with KT, which would see the South Korean operator acquire a 20 percent stake at ZAR36.06 (US$4.6) per ordinary share. A report in South Africa’s Business Day newspaper valued the transaction at ZAR4.6billion (US$585 million). 

The proposed tie-up won’t change Telkom’s corporate strategy or lead to job losses, Telkom said in an e- mailed statement to Bloomberg.

For KT, the deal is seen as a strategy to diversify away from its saturated home market. KT “can’t grow any more in the domestic market,” Choi Nam Kon, a Seoul-based analyst at Tong Yang Securities, told Bloomberg. “They can only seek growth outside Korea. Africa is the last remaining market for mobile operators.”

KT sold its 80 percent stake in Russian operator New Telephone Co. in May and is now thought to be looking at assets in Central America and Africa.

According to Bloomberg, Telkom is 39.8 percent-owned by the South African government while a South African state pension fund, Public Investment Corp., owns 10.9 percent.