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South Africa govt backs MTN, Bharti deal

South Africa govt backs MTN, Bharti deal
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First Published: Wed, Sep 02 2009. 12 05 AM IST
Updated: Wed, Sep 02 2009. 12 05 AM IST
Johannesburg: South Africa’s government backs a proposed tie-up between domestic telecom operator MTN Group Ltd and Bharti Airtel Ltd.
The two firms have been working to conclude a $23 billion (Rs1.12 trillion) cross-ownership deal since 25 May. They have extended talks for a second time to 30 September.
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% stake in Bharti Airtel and Bharti 49% of MTN, but the deal has been delayed by differences over valuations and management rights.
A combined entity would be the third biggest mobile operator based on subscribers, behind China Mobile Ltd and Vodafone Group Plc, although its annual sales of $20 billion would be dwarfed by China Mobile’s $60 billion and Vodafone’s $65 billion.
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First Published: Wed, Sep 02 2009. 12 05 AM IST