BHARTI-MTN DEAL CALLED OFF
Published on Thursday, October 1st, 2009 at 9:48 AMAuthor: admin (5507 Articles)
The much-anticipated deal between India’s Bharti and South Africa’s MTN that aimed to merge the two telecom giant has failed yet again. The contentious issue of dual listing proved to be the deal breaker
Bharti, in a statement, said, the company has decided to disengage itself from the deal. “We hope the South African government will review its position in the future and allow both the companies an opportunity to re-engage.” The statement further said that the South African government had expressed its inability to accept it in the current form. Also, it stated, Bharti would continue to explore international expansion opportunity and could also re-look at the deal if the SA government changes position.
However, the Finance Minister Pranab Mukherjee declined to comment. FM had earlier said that both the Prime Minister and he were positive on the deal.
MTN has said that it would send out a statement as soon as possible. However, the SA Treasury confirmed that the talks for the deal, which needed approval from the Finance Ministry, have ended on mutual agreement.
While analyses were still coming in at the time of this report, Godfrey Mutizuwa, CNBC Africa spoke to CNBC-TV18 and gave an update from the ground: It is not a very clear picture. But this morning we had news that the Finance Minister was going to issue a statement on the deal and we were waiting for that statement. Later on in the day they sent out another statement saying,” No, there would no statement on the issue at all.” But I think to understand the South African government’s position one has to look at the composition of the government that’s in power right at the moment within the Africa National Congress—it is built by unions.
Now the unions have been opposed to South African companies going aboard and we can go back and look at the examples companies listed aboard. There is a lot of disquiet about this movement. Last year saw the unions opposing Vodafone’s acquisition of the remaining stake it had in Vodacom group here and the unions very unhappy with that transaction. They tried to stop it at the last minute—they failed, so it was likely there was going to be a lot of noise as the MTN deal came across—as it transpired that we are likely to see MTN perhaps being submerged within Bharti Airtel.
Source : MoneyControl
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