Bharti closes in on MTN deal

Bharti Airtel has reopened negotiations to merge with African mobile group MTN in a ‘mutual shareholding deal’. The Indian telco revealed that it has signed an agreement with MTN to discuss the potential transaction exclusively until 31 July 2009. Bharti is looking to acquire a 49% shareholding in MTN with the African company taking on an approximate 36% economic interest in Bharti, of which 25% would be held by MTN and the remainder held directly by MTN shareholders. Bharti would also reportedly pay MTN USD2.9 billion. Sunil Bharti Mittal, chairman and managing director of Bharti, 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. 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.’ On 18 May CommsUpdate reported that MTN has invested in the European-Indian Gateway (EIG) cable system, which will increase connectivity between its South and East African operations and India.