S African unions may block Bharti Airtel-MTN deal: report

The long drawn out merger talks between Bharti Airtel and South Africa's MTN Group seem to be running into more and more hurdles. Now a report says South Africa's labour federation Congress of South African Trade Unions (COSATU) is trying to halt the tie-up, though the treasury wants a deal.

"COSATU is quietly putting pressure on government not to allow this transaction," a source close to the MTN and Bharti transaction told Reuters. "They don't want to repeat the bitter pill that happened with the Vodacom and Vodafone deal."

South Africa's top mobile operator Vodacom was sold to Britain's Vodafone and listed on the Johannesburg bourse in May. That deal was almost blocked by COSATU, which feared job losses.

The source said the powerful decision-making national working committee of the ruling African National Congress, was divided on whether the deal should be halted or approved. "There is an internal standoff. A decision has not yet been taken. It's a war of bulldogs," the source said, adding that the treasury wanted the capital inflow the deal would bring.

However, none of the parties involved was willing to confirm the Reuters report. An MTN spokeswoman said the company was not prepared to comment on speculation.

On Sunday South Africa's communications minister, Siphiwe Nyanda, expressed caution over the proposed transaction and said MTN should remain a local company. Earlier, South African President Jacob Zuma had demanded dual listing of shares of the two companies in case of a merger.