Ambanis brawl over RCom's MTN deal

14 June 2008

The two brothers are at it again. Normally, two siblings feuding is as commonplace as potholes on Mumbai roads, but when the two protagonists happen to be two of the wealthiest men in India, and the world, international news bytes are bound to fly.

In the latest chapter of the ongoing saga between the Ambani siblings, elder brother Mukesh is reportedly trying his level best to stymie younger brother Anil's bid to create one of the largest telecommunications companies in the world by entering into a reverse merger with South Africa's MTN. (See: RComm, MTN in share-swap talks: Report)

A reverse merger is a share swap, which in this case, would end up with Anil's Reliance Communications (RCom) becoming a subsidiary of MTN with Anil emerging as the largest shareholder and probable chairman of the merged entity.

Mukesh Ambani, chairman, Reliance Industries (RIL), who had started RCom as Reliance Infocomm had ambitious plans for the communications  firm, which he was forced to cede to younger brother Anil in the settlement when the group was split.

However, RIL has now revisited the Ambani family settlement signed in January 2006 to claim that a decision on a majority stake sale in any of the group companies can be taken only after consultations with the parties involved in the settlement.

MTN, which has 68 million subscribers, is Africa's largest cellular operator. MTN and RCom, with 48 million users, entered exclusive 45-day discussions on 26 May to build a $70 billion emerging market powerhouse after India's top mobile phone company Bharti Airtel ended talks with MTN in a dispute over control. (See: Bharti calls off talks with MTN; alleges breach of terms of agreement)