Deadline looms for Bharti-MTN deal

The fate of a major tie-up between India’s top mobile firm Bharti Airtel and South Africa’s flagship cellular group MTN hung in the balance on Wednesday with the deadline for talks due to expire.

Shares of Bharti Airtel rose almost 1% or 3,65 rupees to hit 422,5 rupees in morning trade with time running out on the exclusive talks.

A spokesperson for Bharti said it was not known when an announcement might be made. The deadline for the conclusion of discussions, which began in May, has already been extended twice.

“The two parties are in exclusive talks until the end of September,” a spokesperson said.

The estimated $24-billion alliance could prove the world’s biggest cross-border deal this year.

The talks between MTN, Africa’s largest cellular group, and Bharti, are aimed at forging a giant with annual revenues of more than $20-billion and 200-million customers.

India’s Financial Chronicle, quoting an unnamed Finance Ministry official, reported on Wednesday that Bharti had asked MTN for two more weeks of exclusive discussions. There was no comment from Bharti.

“We’ll most likely see another extension,” investment analyst Rajay Ambekar of Prudential South Africa told Agence France-Presse by telephone.

Analysts said the two sides may come out with an agreement paving the way for a complex cash and share swap that was first announced in May and would give both companies a minority stake in each other.

But the second broader objective, a full merger of the groups, could take much longer, analysts say, especially because of South African worries about preserving the national identity of MTN.

The South African government has said it is unwilling to sacrifice the company’s “South African character” and raised the idea of a dual listing as a compromise.

But allowing dual-listed companies would involve major changes in India’s foreign exchange laws, something the government says cannot be done immediately.

A South African team which visited India last week to meet regulatory officials briefed government officials in Pretoria on Tuesday about their trip, PTI said.

Many analysts said it was hard to assess the outcome but they believed the companies would announce a third extension of the talks.—Sapa-AFP

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