Teen Traders' Blog

Bharti Airtel, India’s largest Telecom firm on Monday renewed its effort to acquire 49% in the South African telecom company MTN.

As we know, this is the second time the compnay is talking with Bharti and has previously has also talked with Reliance Communication but couldn’t proceed and talks were terminated. The Economist magazine had noted, “If anything, Bharti would be marrying up.”

The companies have now agreed discuss the potential transaction exclusively by July 31 this year.

The New Delhi based Bharti Airtel said in a statement “Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant partnership with MTN Group… Bharti would acquire a 49 per cent shareholding in MTN and, in turn, MTN and its shareholders would acquire an approximate 36 per cent economic interest in Bharti, of which 25 per cent would be held by MTN with the remainder held directly by MTN shareholders,”

If the deal goes through, the combined entity will have revenues exceeding $20 Billion and a subscriber base of more than 200 Million.

The South Africa based mutinational, MTN has significant operations in many of the African and Middle Eastern Companies.

MTN often describes itself as “the leader in telecommunications in Africa and the Middle East”

Airtel has nearly 25% of the mobile connections in India.

CMD, Sunil Mittal said “We are delighted at the prospect of developing a partnership with MTN to create an emerging market telecom powerhouse. Both companies would stand to gain significant benefits from sharing each other’s best practices in addition to savings emanating from enhanced scale,” he added “We see real power in the combination and we will work hard to unleash it for all our shareholders. This opportunity also represents a first of its kind in developing an Indian-African initiative that would serve as a shining example of South-South cooperation.”

MTN shall have appropriate representation on the Bharti Board, the company told in statement.

“Singapore Telecommunications, a major existing shareholder of Bharti, will continue to be a strategic partner and significant shareholder after the implementation of the potential transaction,” the Bharti statement said.