India’s Bharti and South Africa’s MTN are expected to extend their merger talks by as much as four weeks due to the complexity of the deal, according to sources at Dow Jones Newswires. The exclusivity period for talks is scheduled to end on 31 July (Friday), but a source said that a deal is taking “a bit more time as the deal is complicated.” The complications are understood to involve the role SingTel will play in the merged entity. The Singapore firm currently owns 30 percent of Bharti and the companies are discussing how the stake could be maintained if a merger were to go through. One source said that SingTel may receive global depositary receipts in Bharti or an additional stake in Bharti Telecom Ltd., an unlisted entity that holds 45.3 percent in Bharti. Another source said that SingTel could either get a stake in MTN to compensate for a potential share dilution, or can build its position back up through an open-market transaction or by way of providing loans to Bharti to support the merger. “These are the options that are being discussed, but no final decision has been reached,” a source said.

According to the original merger plans – announced by the two operators in May – Bharti will acquire a 49 percent shareholding in MTN, while MTN and its shareholders would acquire an approximate 36 percent stake in Bharti, of which 25 percent would be held by MTN with the remainder held directly by its shareholders. The merger would create a telecoms group with combined revenues of over US$20 billion and a customer base of over 200 million, which would combine Bharti’s market-leading Indian business with MTN’s various business units across Africa and the Middle East. It is the second time that the two parties have discussed a merger; last year’s talks reportedly broke down over Bharti’s refusal to become an MTN subsidiary.