Icasa may not approve MTN, Bharti deal this year

South Africa’s communications regulator said it might not grant approval for the proposed tie-up between cellphone group MTN and India’s Bharti Airtel this year.

Paris Mashile, chairperson of the Independent Communications Authority of South Africa (Icasa), also told Reuters on Tuesday the regulator would not talk to MTN about any deal until “all the documentation and facts and everything” were ready.

Asked if the regulator would try to block the deal, as it tried to do with Vodacom’s transaction with Vodafone, Mashile said: “No. That is not really how we approach it. One size does not fit all.”

The Bharti/MTN transaction, which would create the world’s third-largest mobile group by subscribers, is subject to an end-September deadline.

But the two companies have extended talks twice before, and a person with direct knowledge of the matter said on Monday it was possible the talks could be further extended by a few days.

Bharti and MTN were involved in similar talks last year but failed to reach an agreement, leading to failed negotiations.

Communications Minister Siphiwe Nyanda said he was not interested in blocking the deal.
“What I am saying is all we are interested in is what kind of management agreement outcome results out of this and all we want is that this remains a South African company. That is all,” Nyanda said.

MTN, the country’s second-biggest cellphone operator and the only one still owned by South Africans, was set up with government help in 1994 when apartheid ended as the country’s first black-owned group.

South Africa’s top carrier Vodacom was sold to Britain’s Vodafone and was listed on the Johannesburg bourse in May. That deal narrowly escaped being blocked by powerful trade union Congress of South African Trade Unions (Cosatu), which feared job losses .

Cosatu said on Sunday it would judge the MTN/Bharti deal on its merits, particularly its effect on jobs.

Ranjana Smetacek, a spokesperson for Bharti Airtel, declined to comment on whether a delay in regulatory approval would be a roadblock for the deal.

Bharti has increased the cash component of its offer for a 49% stake in MTN to $10-billion from a proposed $7,6-billion, two people familiar with the matter said last week.

On top of that, Bharti would pay $4-billion in stock for a total package of $14-billion, 7% more than the earlier $13-billion proposed deal.—Reuters

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