After more than a year of on-and-off negotiations, India’s Bharti Airtel and South Africa’s MTN Group appear to be close to striking a deal that could lead to a tie. Bharti Airtel shares jumped as much as per cent on Thursday on news that it had called off merger talks with MTN after the two companies. The SOUTH AFRICAN government said that it supported the proposal merger of Bharti-Airtel and the MTN group in principle. The Indian Government agreed.
|Published (Last):||8 June 2011|
|PDF File Size:||5.13 Mb|
|ePub File Size:||12.55 Mb|
|Price:||Free* [*Free Regsitration Required]|
Fill in your details: Some Indian analysts said the firms would not have embarked on new talks unless control issues had been settled.
Bharti Airtel talks shift to full takeover of MTN – Livemint
Trading equity stakes would give both firms exposure to new markets ripe for growth, while a full merger would yield cost savings, allow for technology sharing, and provide the financial muscle for more expansion, analysts say. Neither Ambani could succeed in doing the deal. Additional reporting by C. Bharti wished MTN management and its board success.
It is a very well considered move and there is a very strong rationale. Leave Your Comment s. We express our profound gratitude to the honourable prime minister of India for his strong support to what could have been a transformational partnership. We see meerger power in the combination and we will work hard to unleash it for all our shareholders.
Subscribe to read | Financial Times
China Mobile Ltd is under pressure at home from an expensive buildout of a new, untested third-generation network that it may seek to expand to developing markets. The MTN deal not going through should not be seen as a dampener. The Companies Act will also have to be amended to take into account anc and accounting implications for a dual-listed company. In a press statement, the Indian telecom major said that if the deal goes through, it would be achieved through a scheme of arrangement, which would include the following principal elements: Bharti also indicated its gratitude to the Indian government for its support: Although it is one of the few companies whose name has not been linked with Zain, Bharti could expand into several African markets with a stake in Zain mdrger its African operations.
Bharti has not given up yet In the end, the politics of national pride derailed the deal as South Africa did not want MTN to lose its independent identity. However, some analysts voiced doubt as to whether a deal would be sealed after similar talks collapsed last year.
We need to scale the Capital wall It was clear from the beginning that regulatory barriers would be the biggest obstacle in consummating the Bharti-MTN deal. Foul language Slanderous Inciting hatred against a certain community Others. Thereafter, the MTN board met and formally called off the deal.
But it has expressed an interest in Nigeria, a key MTN market. We probably have more money flowing out due to over and under-invoicing on the trade account.
There are targets that Bharti could pursue, analysts said. Chandrajit Banerjee, director general, Confederation of Indian Industry, said: My Saved Articles Sign in Sign up. In a press statement, the Indian telecom major said that if the deal goes through, it would be achieved through a scheme of arrangement, which would include the following principal elements:.
Drag according to your convenience. But the South Africans wanted assurances for the future, which the Indian government was not in a position to give as it said that allowing dual listing will need major amendments anx key corporate laws and cannot be done in haste.
As the government gradually opens up the capital account, issuing ordinary shares to overseas investors ought to be on the agenda.
The South African giant has in the past been in failed discussions with the likes of Vodafone, China Mobile and Reliance Communications. Get instant notifications from Economic Times Allow Not now.
But the risks of capital outflows may not be huge. That would have meant investors selling other assets to comply with limits. The deal was complicated. The potential transaction, when completed, would be expected to create value for Bharti shareholders, the release said.
Such arrangements are also seen protecting the national identities of companies. South African communications minister Siphiwe Nyanda said before the announcement on Wednesday that MTN should remain a domestic company. Find this comment offensive?
MTN deal off, what next for Bharti?
Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings. While dual listing is a step towards capital airhel convertibility, it is not necessarily a giant one. Infibeam calls off pact to acquire Snapdeal unit Unicommerce.
Ironically, the transaction under discussion did not involve any loss of national identity for MTN. The announcement that talks were being called off was made after the close of trading. Merher was the first paper to flag off the issue of dual listing as a major stumbling block for the deal in its edition dated July 31, Reliance to buy majority stake in renewable energy services firm Kanoda.
MTN shareholders would take another 11 percent of Bharti. MTN, which had Log in Keep me signed in. Bharti and MTN said discussions were at an early stage and the firms had set an exclusivity deadline of July He will go for something bigger than MTN. Thu, Oct 01 This will alert our moderators to take action. Bharti said the deal would be discussed exclusively till July.