India's Bharti Airtel and South Africa's MTN have called off their merger talks after they were unable to secure the necessary permissions from the South African government.
In a statement to the Bombay Stock Exchange, Bharti said that "the alliance planned between Bharti and MTN was a vision based on solid fundamentals, which had the potential of creating an emerging markets telecom giant and the third largest telecom company in the world. Substantial synergies could have been captured with this proposed transaction."
"The broad structure being discussed by the two sides had taken into account the sensibilities and sensitivities of both companies and both their countries."
Bharti said that the proposed deal took into account their position in their local markets - including listing, tax residences, management and brands. The transaction would have been the single largest Foreign Direct Investment into South Africa and one of the largest outbound FDIs from India.
In its statement, Bharti said that the proposed structure needed an approval from the South African government, which has been refused. Bharti added though that it hopes the government will review its decision and is open to concluding the deal as it currently stands.
Bharti concluded by saying that it will continue to seek overseas investment opportunities.
This is the second attempt by the two companies to try and forge an alliance and the current round of talks had been extended on several occasions. A merger would have created a telecoms giant with more than 200 million customers across India, Africa and the Middle East.