Talks between South African MTN and India’s largest mobile-phone operator, Bharti Airtel, are now centered on a full takeover. Bharti said last week it was in talks with MTN to “combine the strengths of the two leading players from emerging markets, and is accordingly veering toward possible structures to achieve this objective”.
Bharti Group Chairman Sunil Mittal is understood to have held talks with the South African telecom major MTN’s top management in London to work out a broad scheme of arrangements for a possible merger between the two companies.
“Bharti still wants majority control (a 51 per cent stake) but MTN prefers a full takeover which in South Africa can be portrayed as a merger of equals. Talks this week are focused on this (full takeover) and ways it could be done,” The Asian Wall Street Journal said in a report posted online.
It was reported that Bharti was considering paying as much as $20 billion in cash. If the deal were to go ahead it would make the heftiest overseas acquisition ever made by an Indian firm. In neither market have penetration rates yet exceeded a third of the population.
India is adding more subscribers per month than any other country. In Africa, subscriptions are projected to grow by 11 per cent a year until 2011, according to Gartner, a research firm.
While talks are in the early stages, with Bharti only having arranged $12 billion of the money it would need, the possibility of a deal suggests a new breed of Indian firms that are achieving new global successes.
Bharti has for years been harbouring international ambitions—ambitions that extend far beyond its modest ventures in the Seychelles, Guernsey and Jersey.
Buying MTN would allow Bharti to meet its international ambitions in full measure. And the deal would unite the leading companies in the world’s two most promising mobile markets.