S.Africa gov't backs MTN, Bharti merger deal
SOUTH Africa's government backs a proposed tie-up between domestic telecom operator MTN Group and India's Bharti Airtel that could lead to the creation of the world's No. 3 mobile firm. <br>
SOUTH Africa's government backs a proposed tie-up between domestic telecom operator MTN Group and India's Bharti Airtel that could lead to the creation of the world's No. 3 mobile firm.
The two companies have been working to conclude a $23 billion cross-ownership deal since May 25. They extended talks for a second time to Sept. 30 after previously extending them by a month to Aug. 31.
The government in principle supported the proposed transaction, said Tiyani Rikhotso, a spokesman for the communications department.
"It appears to be a good proposal especially given it (is) ... within the framework of south-south cooperation," he said.
"If all the prerequisites of mergers and acquisitions (rules) ... are met, I don't see any reason why anybody will want to stand in the way of what will benefit the people of the two countries."
Under the proposal, an initial cash-and-shares tie-up would see MTN take a 36 percent stake in Bharti and Bharti 49 percent of MTN, with the possibility of a full-blown merger to follow.
The transaction has been delayed by differences over valuations and management rights, with Bharti under pressure to sweeten its part of the deal.
A combined MTN/Bharti would be the third-biggest mobile operator based on subscribers, behind China Mobile and Vodafone although its annual sales of $20 billion would be dwarfed by China Mobile's $60 billion and Vodafone's $65 billion.
DEVELOPMENT AGENDA
South-south cooperation is a key mechanism for the development agenda of India, South African and Brazil under a tri-lateral initiative aimed at unlocking economic opportunities that exist between the three countries.
India and South Africa are in talks on an investment pact that would provide government guarantees to businesses in both countries, Indian Trade Minister Anand Sharma, told journalists last week after talks with his South African counterpart.
Bharti Chairman Sunil Mittal and MTN CEO Phuthuma Nhleko last week met the Indian finance minister and corporate affairs minister, officials said.
The two companies have been working to conclude a $23 billion cross-ownership deal since May 25. They extended talks for a second time to Sept. 30 after previously extending them by a month to Aug. 31.
The government in principle supported the proposed transaction, said Tiyani Rikhotso, a spokesman for the communications department.
"It appears to be a good proposal especially given it (is) ... within the framework of south-south cooperation," he said.
"If all the prerequisites of mergers and acquisitions (rules) ... are met, I don't see any reason why anybody will want to stand in the way of what will benefit the people of the two countries."
Under the proposal, an initial cash-and-shares tie-up would see MTN take a 36 percent stake in Bharti and Bharti 49 percent of MTN, with the possibility of a full-blown merger to follow.
The transaction has been delayed by differences over valuations and management rights, with Bharti under pressure to sweeten its part of the deal.
A combined MTN/Bharti would be the third-biggest mobile operator based on subscribers, behind China Mobile and Vodafone although its annual sales of $20 billion would be dwarfed by China Mobile's $60 billion and Vodafone's $65 billion.
DEVELOPMENT AGENDA
South-south cooperation is a key mechanism for the development agenda of India, South African and Brazil under a tri-lateral initiative aimed at unlocking economic opportunities that exist between the three countries.
India and South Africa are in talks on an investment pact that would provide government guarantees to businesses in both countries, Indian Trade Minister Anand Sharma, told journalists last week after talks with his South African counterpart.
Bharti Chairman Sunil Mittal and MTN CEO Phuthuma Nhleko last week met the Indian finance minister and corporate affairs minister, officials said.