India's Bharti Airtel has resumed merger talks with South Africa's MTN - after they broke down last year. Under the proposed terms of the deal, Bharti would acquire a 49% shareholding in MTN and, in turn, MTN and its shareholders would acquire an approximate 36% economic interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders.
Such a merger would create an operator with over USD 20 billion in annual sales and more than 200 million customers. The broader strategic objective would be to achieve a full merger of MTN and Bharti as soon as it is practicable.
Sunil Bharti Mittal, Chairman and Managing Director of Bharti, said "We are delighted at the prospect of developing a partnership with MTN to create an emerging market telecom powerhouse. Both companies would stand to gain significant benefits from sharing each other's best practices in addition to savings emanating from enhanced scale. We see real power in the combination and we will work hard to unleash it for all our shareholders. This opportunity also represents a first of its kind in developing an Indian-African initiative that would serve as a shining example of South-South cooperation."
The resultant company would continue to be listed on South Africa's Johannesburg Stock Exchange.
Singapore Telecommunications, a major existing shareholder of Bharti, will continue to be a strategic partner and significant shareholder after the implementation of the potential transaction.
If the deal is carried out, Bharti would be the primary vehicle for both Bharti and MTN to pursue further expansion in India and Asia while MTN would be the primary vehicle for both Bharti and MTN to pursue further expansion in Africa and the Middle East.
The companies warned that the discussions are at an early stage and may or may not lead to any transaction.