Business Daily from THE HINDU group of publications
Wednesday, Sep 23, 2009
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Business Daily from THE HINDU group of publications Wednesday, Sep 23, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Telecommunications Info-Tech - Mergers & Acquisitions
Our Bureau New Delhi, Sept. 22 Bharti Airtel on Tuesday said that the merger talks with South African major MTN will be compliant with the laws in both countries. The company said that it will approach relevant authorities for approvals or exemptions, if required, at the appropriate time. “We can confirm that the structure, under discussion with MTN, will be fully compliant with the laws in both countries. All relevant approvals, including exemption from open offer from SEBI (if required), would be sought at the appropriate time,” said a Bharti spokesperson. Bharti Airtel Ltd and South Africa’s MTN Group had restarted merger talks to create a $20-billion (in revenue terms) emerging markets telecom entity. The potential value of the deal in which both firms pay cash and stock for stakes in each other is more than $23 billion. However issues related to minority shareholding and regulatory issues are holding up the deal. Cash versus equityThe minority shareholders want Bharti to sweeten the deal by giving them more cash than equity. This could make the deal expensive for Bharti. On the other hand, issues related to dual listing have also been raised by the South Africans in a bid to retain the identity of MTN. Top executives of Bharti and MTN are understood to have met Government officials in India to find a solution to the regulatory hurdles. IT Ministry’s standThe Communications and IT Minister, Mr A. Raja, on Tuesday said his Ministry cannot take a call on the proposed deal between Bharti and MTN, but made it clear that if the transaction needs a change in licence conditions, then telecom regulator TRAI would be consulted. “The entire (Bharti-MTN) deal is not in the domain of our Ministry. The matter is being dealt with by the Finance Ministry,” Mr Raja said on the sidelines of an event. South Africa has said it is working closely with India on the proposed deal. If the merger goes through. it will create a company with 200 million mobile subscribers spread across 24 countries in Asia, Africa and the Middle East. HoldingsAccording to the initial announcement, the two companies are exploring a potential transaction whereby MTN and its shareholders would acquire 36 per cent stake in Bharti Airtel. Bharti would acquire 49 per cent shareholding in MTN. But the structure is likely to change as the demands of minority shareholders have to be met. Both the companies have agreed to discuss the potential transaction exclusively until September 30. Talks with MTN still on: Bharti Airtel Bharti-MTN extend merger talks till Sept Bharti, MTN to explore synergies Bharti-MTN deal: Pointer to the future More Stories on : Telecommunications | Mergers & Acquisitions | Bharti Tele-Ventures Ltd
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