Mittal leads Bharti Airtel in merger talks with MTN

Mittal is holding talks with MTN chairman M. C. Ramaphosa, CEO P. F. Nhleko and single majority stakeholder Azim Mikati, industry sources said. According to sources, while Bharti wants ‘exclusivity agreement’ with MTN to be signed this week, MTN management is believed to have disagreed with him over signing of this particular agreement citing that it would be ‘anti-shareholder’.

An exclusivity agreement would bar MTN from sharing any information or arrangements for a merger with any other firm.

Bharti management is believed to have offered 168 rands a share to MTN shareholders, while the South African company wants a higher price. It is also learnt that Bharti wants to offer 70 percent stock and 30 percent cash for a possible merger to the MTN shareholders, whereas the South African telecom firm has asked for a 50 percent stock and 50 percent cash deal.

Sources added that MTN management wants Mittal to be the Non-Executive Co-Chairman of the proposed joint entity, whereas Mittal wants to hold the post of Non-Executive Chairman.

Bharti’s attempt to acquire MTN’s telecom operations across 21 countries in Africa is believed to have received the backing of the Indian government. Bharti’s bid may not just be a breathtaking business move, but also allows India to gain an important foothold in the continent and give it leverage in geo-political matters.

According to senior government officials, if successful, this deal will constitute not just India’s largest outbound foreign direct investment (FDI) transaction but can also strategically strengthen the Indian government’s ability to leverage diplomatic relationships across many key African states.

When contacted a Bharti spokesperson declined to comment.