The long-mooted merger of South African telecoms group MTN and Indian telco Bharti Airtel is being held up by legal issues in India, citing comments by South African president Jacob Zuma, according to Reuters. While the South African leader did not specify the exact nature of the legal wrangling, it has also recently been reported that there is pressure on India to agree to a dual listing of the companies before the 30 September deadline for the exclusive negotiations passes. President Zuma said of the matter: ‘I am told there are hitches in terms of the law, particularly on the Indian side because you are talking about companies that must come together.’ It is believed that the legal issues could be resolved prior to the deadline, although it is also feasible that the date for the negotiations may be extended.
Should the disputed matter of the company’s listings be resolved, further impedances to the tie-up are still looming. Last week the South African telecoms regulator, the Independent Communications Authority South Africa (ICASA), revealed it may not grant approval for the deal. Financial terms could also derail the talks; having been involved in similar discussions last year, Bharti and MTN failed to reach an agreement, with valuation one of the sticking points. However, in this latest round of discussions it is understood that Bharti has increased the cash component of its offer to USD10 billion for a 49% percent stake in MTN, on top of which it would pay a further USD4 billion in stock.