Bharti would acquire an approximate 49% shareholding in MTN. Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until 31 July, 2009.<\/p>\n
The potential transaction between Bharti and MTN would create a leading telecommunication service provider group aligning Bharti’s market leading Indian business with MTN’s market leading African and Middle Eastern operations, MTN said.<\/p>\n
The potential transaction would also represent a significant development in emerging market cooperation between India and South Africa.<\/p>\n
David Shapiro, a consultant for Sasfin said: “The MTN\/Bharti deal is an interesting combination, and a potentially exciting prospect. It’s still early days, but it takes MTN into the Asian continent.<\/p>\n
“Interestingly, it leaves its South African rival nowhere, and should this deal take place between MTN and Bharti, the ranking between Vodacom and MTN will only widen, with the former already far behind in Africa,” Shapiro said.<\/p>\n
Shares in Vodacom gave up 5 cents to R56.80. Phuthuma Nhleko, CEO of MTN said: “The rationale for this potential transaction between MTN and Bharti is highly compelling. It addresses our strategic imperative of becoming one of the pre-eminent emerging market
telecommunications companies with leading positions in three of the fastest-growing wireless markets globally India, Africa and the Middle East, with no overlapping footprint.<\/p>\n
“We are excited at the prospect of teaming up with Bharti, India’s number one wireless operator and one of the most strongly capitalised players amongst its emerging market peer group. This would create a highly visible commercial partnership between South Africa and India.”<\/p>\n
The potential transaction, when completed, would be expected to create value for MTN shareholders due to, among others, synergistic benefits and a further diversification of MTN’s income streams into the fast-growing and relatively under-penetrated Indian market.<\/p>\n
The potential transaction is also expected to create value for Bharti shareholders, including MTN and MTN shareholders going forward, due to, among others, synergistic benefits and further diversification of Bharti income streams into the fast-growing and relatively under-penetrated African and Middle Eastern markets.<\/p>\n
MTN would continue to be listed on the securities exchange operated by JSE Limited and would be the primary vehicle for both Bharti and MTN to pursue further expansion across Africa and the Middle East while Bharti would be the primary vehicle for both Bharti and MTN to pursue further expansion in India and Asia.<\/p>\n