MTN-Bharti deadline looms

The fate of a major tie-up between India's top mobile firm Bharti Airtel and South Africa's flagship cellular group MTN hung in the balance on Wednesday with the deadline for talks due to expire.

Shares of Bharti Airtel edged down 0.06 percent or 0.25 rupees to 418.60 rupees in afternoon trade amid uncertainty over the outcome of the talks slated to end by the close of the day.

A spokesman for Bharti said it was not known when an announcement might be made. The deadline for the conclusion of discussions, which began in May, has already been extended twice.

"The two parties are in exclusive talks until the end of September," a spokesman said.

The estimated 24-billion-dollar alliance could prove the world's biggest cross-border deal this year.

The talks between MTN, Africa's largest cellular group, and Bharti are aimed at forging a telecom giant with annual revenues of over 20 billion dollars and 200 million customers.

India's Financial Chronicle, quoting an unnamed finance ministry official, reported Bharti had asked MTN for two more weeks of exclusive discussions. There was no comment from Bharti.

"We'll most likely see another extension," investment analyst Rajay Ambekar of Prudential South Africa told AFP by telephone.

Analysts said the two sides may come out with an agreement paving the way for a complex cash-and-share swap first announced in May that would give both companies a minority stake in each other.

But the second broader objective, a full merger, could take much longer, analysts say, especially because of South African worries about preserving MTN's national identity.

The South African government has said it is unwilling to sacrifice the company's "South African character" and had raised the idea of a dual listing as a compromise.

But allowing dual-listed companies would involve major changes in India's foreign exchange laws, something the government says cannot be done immediately.

India's ET Now TV channel reported MTN chief executive Phuthuma Nhleko would meet South African government officials Wednesday to discuss the tie-up with Bharti.

The two companies will take a final decision on the deal after the meeting, it said.

A South African team visited India last week to meet regulatory officials.

According to the Economic Times, the Indian government is waiting for its South African counterpart to come back with a proposed new deal structure that would comply with Indian laws.

The finance ministry is likely to accommodate the deal if it is not in direct violation of India's policy on dual-listed companies, the newspaper said. There was no immediate South African government comment.

Bharti Airtel and MTN relaunched talks in May, one year after their earlier merger discussions collapsed in acrimony over which side would control a merged group.

Under the initial terms announced in May 2009, Bharti would acquire a 49-percent shareholding in South Africa's flagship mobile company MTN. MTN and its shareholders would get a 36-percent stake in Bharti -- of which 25 percent would be held by MTN with the remainder by MTN shareholders.

MTN-Bharti deal - comments and views

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