Under the terms of the proposed deal, Bharti would acquire a 49% shareholding in MTN. MTN and its shareholders would also acquire an approximate 36% interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders. The two companies have agreed to an exclusive discussion around the proposed deal until July 31, 2009.
The potential transaction between would create a telecommunications service provider group with huge footprints on the Indian sub-continent, as well as within Africa and Middle East. The merged organization would boast a footprint in around 30 countries, with revenues over USD20 billion, and more than 200 million subscribers.
Says Sunil Bharti Mittal, Chairman and Managing Director of Bharti: “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.”
A major existing shareholder of Bharti, Singapore Telecommunications, will continue to be a strategic partner and significant shareholder after the potential transaction is concluded.
The discussions are said to be at an early stage, and according to a statement issued by Bharti, may or may not lead to any transaction. No decisions or agreement have been made by either party, and the exact terms of the potential deal are still open to negotiation.
– Charl Lombard