Pranab Mukherjee welcomes Bharti-MTN deal

26 May 2009

Finance minister Pranab Mukherjee today said the proposed $23-billion Bharti-MTN deal would add a new dimension to South-South cooperation.

"It is a welcome move and I welcome this. It has added a new dimension to our South-South cooperation," Mukherjee said in an interview to private television news channel.

The talks could lead to a merger creating one of the world's biggest cell phone groups by subscribers through the combination of India's biggest operator and MTN, which runs networks across 21 markets in Africa and the Middle East.

Yesterday, as news of the proposed merger trickled out (See: Bharti, MTN revive merger talks), Bharti's stock was hammered on concerns that the deal might prove expensive on account of the high valuation. Its shares fell 5.4 per cent to Rs 811.40, while MTN's shares went up by 14 per cent at the Johannesburg Stock Exchange. 

However, Bharti Airtel today said that it does not expect funding requirements for the deal to be onerous.

Bharti Airtel's institutional investors have given the green signal to the company's plans to merge with South African telecom major MTN Group, as they feel that access to emerging markets such as Africa and West Asia is crucial for the long-term growth prospects of the company.