Tuesday, March 24, 2009

India's Bharti Airtel and MTN Negotiate Possible Combination

Bharti Airtel and MTN Group Limited confirmed that they are discussing a possible combination that would create a leading telecommunications service provider group aligning Bharti's market leading Indian business with MTN's market leading African and Middle Eastern operations. A full merger of MTN and Bharti would create a leading emerging market telecom operator with current combined revenues of over USD 20 billion and a combined customer base of over 200 million.

In a press statement, the companies said they are exploring a potential transaction whereby Bharti would acquire a 49% shareholding in MTN and, in turn, MTN and its shareholders would acquire an approximate 36% economic interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders. Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until July 31, 2009.

"We are delighted at the prospect of developing a partnership with MTN to create an emerging market telecom powerhouse. Both companies would stand to gain significant benefits from sharing each other's best practices in addition to savings emanating from enhanced scale. We see real power in the combination and we will work hard to unleash it for all our shareholders. This opportunity also represents a first of its kind in developing an Indian-African initiative that would serve as a shining example of South-South cooperation," stated Sunil Bharti Mittal, Chairman and Managing Director of Bharti.

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