Open letter to South Africa’s students‚ universities and government‚ represented by Minister in the .
TALKS between Bharti Airtel and the MTN Group to create the world's third largest mobile operator collapsed for the second time in just over a year yesterday.
Bharti, India's largest mobile operator, blamed the South African government for the latest breakdown in a deal which faced close scrutiny from regulators and politicians. South Africa was eager to retain MTN's national character and had approached Indian authorities to consider a dual-listed entity, a structure Indian law does not allow.
"We hope the South African government will review its position in the future and allow both companies an opportunity to re-engage," Bharti said, adding it would continue to explore international expansion opportunities.
Shares in MTN, Africa's biggest mobile operator by subscribers, fell as much as 3,5percent to R119 after the news. The rand fell as much as 2,56percent to 7,62 against the dollar, according to Reuters data. Ahead of the news, shares in Bharti closed 0,1percent lower in a market that rose 1,6percent.
Bharti and MTN revived talks in May, a year after previous negotiations broke down over who would control the resulting emerging markets giant with more than 200 million customers across India, Africa and the Middle East. Under the initial terms outlined in May, MTN and its shareholders would take a 36percent economic interest in Bharti, who would end up with 49percent of MTN.
The deal would have given both exposure to new markets ripe for growth, while a full merger, the eventual aim of the talks, would yield cost savings, allow for technology sharing and provide financial muscle for more expansion, analysts say.
A combined entity would have been the third biggest mobile operator based on subscribers, behind China Mobile and Vodafone, although its annual sales of R150billion would be dwarfed by China Mobile's R450billion and Vodafone's R488billion.
The exclusive talks over the deal were initially due to end on July 31 but were extended twice earlier.
Bharti had increased the cash component of its offer for a 49percent stake in MTN to R75billion from a proposed R57billion, two people familiar with the matter had said.
On top of that, the Indian firm was paying R30billion in stock for a total package of R105billion, seven percent more than an estimated R98billion proposed initially.
Standard Chartered and Barclays were advising Bharti Airtel, while Bank of America Merrill Lynch and Deutsche Bank were advising MTN.
Labour federation Cosatu had said it would examine the deal to ensure workers' interests were protected, while sources have said it was trying to halt the deal. - Reuters