Contours of Bharti Airtel deal may change: MTN chief
28 Aug 2009
South African telecom major MTN Group's chief executive Phuthuma Nhleko said on Thursday that the contours of the proposed deal with India's telecom company Bharti Airtel could change over the next month, as the companies hope to finalise the deal by the end of September.
''The contours that were announced on 25 May may very well change,'' Nhleko said during a webcast of the company's interim half-year results from Johannesburg. ''Or it may stay the same,'' he was quick to add. ''Whatever strategic objectives that are there have to be balanced out by value for the shareholders.''
On 25 May, MTN Group and Bharti Airtel announced that they had restarted negotiations, exploring a potential transaction that would lead to an eventual merger between the two telecom giants. The transaction is expected to create the third largest telecom operator in the world, with around $20 billion (Rs98,000 crore) in revenues and nearly 200 million subscribers.
Under the deal announced then, MTN and its shareholders would acquire approximately 36 per cent interest in Bharti Airtel, of which 25 per cent would be held by MTN and the remaining 11 per cent would be held directly by its shareholders. Bharti in return would acquire approximately 49 per cent shareholding in MTN.
''The rationale for the transaction is compelling and includes diversification and synergistic benefits as well as addressing the objective of becoming one of the pre-eminent emerging market telecommunications companies,'' the MTN statement on Thursday said.
''No decision or agreement to acquire any shares or global depository receipts (GDR) or implement the potential transaction outlined above has yet been made by the boards of either MTN or Bharti. Shareholders will be advised of any further developments,'' it added.
