(Reuters) - The Canadian government has blocked a bid from a company controlled by Egyptian telecom tycoon Naguib Sawiris to buy a national fiber optic network, citing national security concerns.
Manitoba Telecom Services Inc (MTS) had announced in May it would sell its Allstream fiber optic network for C$520 million to Accelero Capital Holdings, which is controlled by the Egyptian telecom magnate.
But MTS said late on Monday the federal government blocked the deal, citing “unspecified national security concerns.”
The government also rejected MTS and Accelero’s offer to take necessary actions to address those concerns, the company said in a statement on Monday.
Canadian Industry Minister James Moore confirmed the decision in a brief statement.
“The Government of Canada has concluded its review of Accelero Capital Holdings’ proposed acquisition of the Allstream division of Manitoba Telecom Services Inc. (MTS) under the national security provisions of the Investment Canada Act. The result of this review is that the transaction will not proceed,” the statement said.
The statement noted that MTS Allstream operates a national fiber optic network that provides critical telecommunications services to businesses and governments, including the Canadian government.
Reporting by Neha Alawadhi in Bangalore and Jeffrey Hodgson in Toronto; Editing by Eric Walsh