MTN may go back to Bharti for an alliance: reports
19 July 2008
Mumbai: South African telecom giant MTN, which called off merger talks with Reliance Communications (RCom) on Friday, is weighing alternatives, including reopening talks with its erstwhile suitor Bharti Airtel, reports quoting industry sources said.
Anil Dhirubhai Ambani Group firm Reliance Communications pulled off from talks with MTN following a rift between the Ambani brothers – Mukesh and Anil – over the merger of Reliance Communications with MTN.
MTN and Reliance had spent weeks considering structures for a combined group with 115 million subscribers from Lagos to Mumbai. But the hopes were dashed when Reliance Industries, controlled by Mukesh Ambani, initiated arbitration proceedings.
MTN had earlier pulled out of merger talks with Bharti Airtel in May after the two companies failed to agree on the corporate structure of the combined entity.
''Owing to certain legal and regulatory issues, the parties are presently unable to conclude a transaction. Accordingly, it has been mutually decided to allow the exclusivity agreement to lapse,'' Reliance Communications said in a statement.
''Owing to certain legal and regulatory issues, the parties are unable to conclude a transaction," MTN said in a statement issued in Johannesburg. ''Accordingly, it has been mutually decided to allow the exclusivity agreement to lapse and caution is no longer required to be exercised by shareholders when dealing in MTN securities,'' it added.
Reports earlier said MTN, sensing failure of talks with Reliance Communications, had already sent feelers to Bharti for reviving talks. The reports also cited sources close to the development as saying that Bharti was ''open to take the discussions with MTN forward.''
The South African company was also reluctant to surrender management control of MTN.