Bharti Airtel on Why Deal with MTN Failed
The following is Bharti Airtel’s official statement on failure of merger talks with South Africa’s MTN:
Bharti and MTN have decided to disengage from their discussions when the exclusivity period ends on September 30, 2009.
The alliance planned between Bharti and MTN was a vision based on solid fundamentals, which had the potential of creating an emerging markets telecom giant and the third largest telecom company in the world. Substantial synergies could have been captured with this proposed transaction.
The broad structure being discussed by the two sides had taken into account the sensibilities and sensitivities of both companies and both their countries. Bharti and MTN are national champions and the proposed deal structure took into account their leadership in their respective geographies to ensure continuity of business - including listing, tax residencies, management, brand etc. This transaction would have been the single largest Foreign Direct Investment into South Africa and one of the largest outbound FDIs from India. The deal would have been a significant step in promoting South-South cooperation - a vision of the two countries.
This structure needed an approval from the government of South Africa, which has expressed its inability to accept it in the current form. In view of this, both companies have taken the decision to disengage from discussion.
Bharti 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.
Bharti is grateful to the various Indian government authorities, in particular the Minister of Finance, the Minister of Commerce and Industry and the Minister of Corporate Affairs. We express our profound gratitude to the Hon’ble Prime Minister of India for his strong support to what could have been a transformational partnership.
Bharti will continue to explore international expansion opportunities that are consistent with its vision and bring value to its shareholders.
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