To enjoy the full Mail & Guardian online experience: please upgrade your browser
25 Mar 2010 08:39
Bharti Airtel looked set to wrap up its $9-billion deal to buy most of Kuwaiti telecom group Zain’s African assets, giving India’s top mobile operator a foothold in the frontier market in its third attempt.
Bharti, which failed twice to acquire African telecoms operator MTN Group, is desperate to expand in new markets, as cut-rate competition in its home turf—the world’s fastest growing—squeezes margins and clouds growth outlook.
Controlled by billionaire Sunil Bharti Mittal, who started his career selling bicycle parts in India, Bharti is battling newcomers such as Norway’s Telenor and Tata Teleservices, part owned by Japan’s NTT DoCoMo.
“It’s a good deal because Africa is the last bit left among emerging markets. And Bharti gets access to a lot of synergies in value-added services,” said Girish Trivedi, deputy director of the South Asia and Middle East technology team at consultancy Frost & Sullivan.
“Imagine the time it would have taken them to build a leadership position in so many countries through greenfield expansion?”
Zain’s board approved the deal on Wednesday and the company expects to sign the deal in the next few days.
Africa has already attracted global players such as Vodafone and France Telecom, while China Unicom, China’s number two mobile carrier is keen to participate in the privatisation of a Nigerian telecoms company.
Bharti, 32% owned by Singapore Telecommunications, will also battle with MTN, with which it tried to seal a $24-billion deal before tie-up talks collapsed in October.
Bharti is expected to make an announcement as the deadline for exclusive talks with Zain ends on Thursday.
“The reaction of the stock price reflects the deal being done at attractive financing terms.
Due diligence for the deal, the second-biggest overseas acquisition by an Indian buyer after Tata Steel’s $13-billion purchase of Corus in 2007, has been completed successfully, Zain said on Wednesday.—Reuters
Create Account | Lost Your Password?