Update on Airtel-MTN talks this week; MTN board meet on Aug 18
New Delhi: Bharti Airtel and South Africa's
MTN are likely to announce the status this week of the
proposed merger to create a USD 23-billion entity as period
for exclusive talks between them expired on July 31.
The telecom majors could not come to any conclusion in
their exclusive talks, started on May 25 for a possible share
swap deal between the two firms, said market sources.
Recently, Corporate Affairs Minister Salman Khursheed had
said that any proposal to change the equity shareholding of
the company would require the government's approval. Bharti
Airtel officials remained tight-lipped on whether the deal was
on and the period would be extended or whether talks had
Neither Bharti nor MTN issued a statement about the
present status of the dialogue.
Sources said MTN board may meet on August 18 to discuss
the emerging situation. An email questionnaire sent to MTN
Sidhharth Behura, Secretary in the Department of Telecom,
had maintained that there is no deal as yet, so there is no
question of seeking any information from them. And also they
do not require any approvals for FDI up to 74 percent.
Analysts said the silence of the firms so far indicates
the negotiations are hitting some points of disagreement.
Azmi Mikati, chief executive of the M1 Group -— one of
the largest shareholders in MTN-- had reportedly said talks
would "most probably" be extended till August-end as the deal
was complex and involved multiple jurisdictions.
Lebanon’s Mikati family controls about 10 percent of MTN
through the M1 Group. Mikati is also a non-executive member on
the MTN board.
Bharti will have to make a net cash payment of around USD 4
billion to acquire a 49 percent stake in MTN, which, in turn,
will get a 36 percent economic interest in the Indian firm.
Sources said many MTN shareholders complained that the
price was not high enough. So, the deal may have to be
sweetened to appease them.
If the deal goes through it will create a USD 61 billion (in
terms of market cap) telecom goliath with combined revenues of
USD 23 billion and over 200 million subscribers across Africa,
Asia and the Middle East.