The South African Treasury on Wednesday played down its role in tanked merger talks between flagship mobile operator MTN and India’s Bharti, saying the two companies had agreed to call off talks.
Bharti said talks to create the world’s third-largest telecom company had been called off after the proposal had failed to win the South African government’s approval by the time the deal’s deadline had expired on Wednesday.
“The Ministry of Finance did not have to approve the merger as both companies agreed to terminate it,” South African Treasury spokesperson Lindani Mbunyuza told Agence France-Presse by email.
In a statement, the Treasury said MTN had informed Finance Minister Pravin Gordhan on Wednesday that the companies had “mutually decided to terminate further discussions”.
They were not able “to conclude all outstanding matters to enable the transaction to proceed”.
While the South African government said merger talks should be left to companies, relationships outside the current foreign exchange regulations required the approval of the finance minister.
“This was the case with the proposed MTN-Bharti merger, which required certain exchange control and other approvals,” the Treasury said.
The politically sensitive tie-up plan, valued at $24-billion, had drawn calls from South African politicians to preserve MTN’s South African character.
Bharti said the South African government “has expressed its inability to accept it [the proposed deal] in the current form” and “in view of this, both companies have taken the decision to disengage from discussion”.
The company hoped “the South African government will review its position in the future and allow both companies an opportunity to re-engage”.
The South African Treasury said both the Indian and South African finance ministries were committed to working closely “to lay the basis for the development of mutually beneficial mechanisms for such mergers”.
“In this regard, the National Treasury has invited our Indian counterparts to South Africa to continue working towards a framework to support the growth and expansion of companies in both countries,” the statement said. — AFP