Bharti-MTN deal hinges on Manmohan-Zuma talks
22 Sep 2009
With only government and regulatory hurdles now holding up the Bharti Airtel-MTN Group merger deal, its fate is likely to hinge upon the bilateral talks between India and South Africa during G20 summit in Pittsburg, USA this week.
The two sides are certain to discuss the $24-billion proposal to create the world's third largest mobile telephone company, and the signals emanating from Prime Ministers Manmohan Singh and Jacob Zuma after their meeting could decide its fate.
Meanwhile, a senior delegation of officials from South Africa's treasury will travel to New Delhi today (Monday) to meet finance ministry officials and discuss the proposed transaction, according to a Bloomberg report quoting a South African treasury spokeswoman. The trip will be for ''only a day or two,'' she said, declining to comment further.
All indications are that the two companies have hammered out the terms of the deal, though understandably neither company wishes to comment on this. However, South Africa is insisting on dual listing of the shares of the two companies (on the stock exchanges of both countries), which is virtually impossible under current Indian regulations.
While Prime Minister Singh is expected to express support for the deal, it is unlikely that he will agree to change Indian regulations to accommodate the deal. Much depends on South African finance minister Pravin Gordhan and director-general of the treasury department Lesetja Kganyago, who along with Prime Minister Zuma could decide in the next week or so whether the merger goes through.
Indian laws a hinderance: Moily
Meanwhile in a bold statement, union law minister M Veerappa Moily said on Saturday that the laws of the land are coming in the way of expansion of businesses. Asked by DNA Money whether Indian laws were stalling the proposed merger between Bharti Airtel and South African telco MTN, he said, "That is true".
The minister clarified that his opinion does not pertain to the specific case of Bharti-MTN but to the larger issue of corporate expansion. "We should not stop expansion of companies," Moily said.
Asked if the government was looking at options to resolve the legal tangle in the case of the proposed merger between Bharti and MTN, Moily said, "This specific case has not come to my ministry."
