Bharti blames SA government for MTN deal failure – Mobile World Live

Bharti blames SA government for MTN deal failure

01 OCT 2009

India’s Bharti and South Africa’s MTN have cancelled their US$23 billion merger plans for the second time in two years, with Bharti blaming the South African government for the collapse. “Bharti and MTN have decided to disengage from their discussions when the exclusivity period ends on September 30, 2009,” Bharti said in a statement yesterday. “The broad structure being discussed by the two sides had taken into account the sensibilities and sensitivities of both companies and both their countries… This structure needed an approval from the government of South Africa, which has expressed its inability to accept it in the current form.” A Financial Times report notes that the companies called time hours after Siphiwe Nyanda, South Africa’s communications minister, said it would be sad if a merger ended up with MTN “in the hands of foreign nationals.” 

A Bharti/MTN tieup would have created an emerging markets telecoms giant with combined revenues of over US$20 billion and a customer base of over 200 million (making it the world’s third-largest mobile operator). However, Bharti investors were wary of the deal, and Bharti Airtel’s shares jumped almost 12 percent this morning as the collapse in talks removed worries over a likely impact on earnings. Talk has now turned to whom Bharti could eye for future acquisition activity, especially as the operator stated it will “continue to explore international expansion opportunities.” Zain is one potential candidate, as the operator is considering the sale of its pan-African assets. But there’s always the chance that Bharti and MTN could get lucky third-time around; in its statement, Bharti stressed that it “has enjoyed its engagement with the MTN management and its Board; and wishes them continued success. We hope the South African government will review its position in the future and allow both companies an opportunity to re-engage.”

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