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.
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Shares of Bharti ended flat in cautious trade at Rs Such arrangements are also seen protecting the national identities of companies. Never miss a great news story! MTN shareholders would take another 11 percent of Bharti.
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.
The South African rand slipped 2. But the Indian company mergger not totally given up, if its statement has is anything to go by. Fill in your details: Get instant notifications from Economic Times Allow Not now. Some Indian analysts said the firms would not have embarked on new talks unless control issues had been settled. Although it is one of the few companies whose name has not been linked with Zain, Bharti could bgarti into several African markets with a stake in Zain or its African operations.
Chandrajit Banerjee, director general, Confederation of Indian Industry, said: We probably have more money flowing out due to over and under-invoicing on the trade account.
This is our second attempt at forging a deep and meaningful alliance with MTN. ET 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, Thereafter, the MTN board met and formally called off the deal.
It is premature to conclude that Bharti had reached the end of the road for its overseas acquisition plans, said Monish Chatrath, executive director and head of risk advisory services and markets leader at consultancy Mazars.
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 to key corporate laws and cannot be done in haste. Devidutta TripathyGugulakhe Lourie.
The Bharti Group head had met the prime minister three times and held discussions with with finance minister Pranab Mukherjee as well as top government officials in a number of ministries. Ironically, the transaction under discussion did not involve any loss of national identity for MTN. It has been eyeing another big deal for some time and held failed talks last year with both Bharti and rival Reliance Communications.
MTN deal off, what next for Bharti? – Livemint
Choose your reason below and click on the Report button. Naturally, friends and well-wishers of Sunil Mittal are disappointed.
But the risks of capital outflows may not be huge. However, some analysts voiced doubt as to whether a deal would be sealed after similar talks collapsed last year. Bharti and MTN said discussions were at an early stage and the firms had set an exclusivity deadline of July Your Reason has been Reported to the admin. 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.
While dual listing is a step towards capital account convertibility, it is not necessarily a giant one. Looking ahead, the Indian government needs to think about the changes in our capital account regime that will facilitate the large cross-border transactions that Indian companies aspire to. Find this comment offensive? Reliance to buy majority stake in renewable energy services firm Kanoda.
The potential transaction, when completed, would be expected to create value for Bharti shareholders, the release said. The South African giant has in the past been in failed discussions with the likes of Mn, China Mobile and Reliance Communications.
Bharti Airtel talks shift to full takeover of MTN
Indian telecom major Bharti Airtel has informed the exchanges that it is in talks to pick up a stake in MTN, Africa’s largest mobile group. There are targets that Bharti could pursue, analysts said. To see your saved stories, click on link hightlighted in bold.
The MTN deal not going through should not be seen as a dampener. South African communications minister Siphiwe Nyanda said before the announcement on Wednesday that MTN should remain a domestic company. Bharti wished MTN management and bjarti board success.