Suspense continues: Bharti, MTN extend talks till 31 August

India's Bharti Airtel Ltd and South Africa's MTN Group Ltd today extended by a month their 31 July deadline to conclude their exclusive merger talks. If successful, this merger will create the world's third-largest mobile phone operator.

In a joint statement, Bharti and MTN announced that they had extended merger talks until 31 August. ''As discussions between the parties regarding the potential transaction are continuing, both parties have agreed to extend the exclusivity period,'' New Delhi-based Bharti said in a statement to the Bombay Stock Exchange on Monday.

The statement added, ''No decisions or agreement to acquire any shares or implement the transactions outlined above have been made by the boards of either Bharti or MTN and the discussions may or may not lead to any transaction. The structure and terms of the potential transaction may be adjusted to reflect further discussions between the parties.''

Bharti, India's biggest wireless operator, proposes to buy 49 per cent of MTN, while Africa's largest mobile-phone company and its shareholders plan to acquire 36 per cent of Bharti, the two companies said on 25 May.

Bharti has offered 86 rand ($11) plus 0.5 Bharti shares per MTN share. The approval of holders of 75 per cent of MTN is needed for the transaction to succeed. Some MTN shareholders, including Coronation Asset Managers, which holds about 5 per cent, have rejected the proposal.

An agreement would help the companies trim costs and challenge Vodafone Group Plc, the world's biggest mobile-phone company, which is counting on the more than 1.7 billion people in Africa and India for growth. Bharti and MTN plan to spend about $7 billion this year to extend their reach in markets from the Cape of Good Hope to the Himalayas that contributed almost 90 per cent of Vodafone's new users.