R-Com may re-open merger talks with MTN: report
01 Jun 2010
South Africa's MTN, the continent's biggest mobile phone operator, could reopen merger talks with India's Reliance Communications at a board meeting later in the day today, The Economic Times newspaper reported, citing an unnamed source.
The two carriers had failed to arrive at a deal two years ago when Mukesh Ambani, who heads India's most valuable private group Reliance Industries Ltd, asserted a right of first refusal on the sale of a stake in Reliance Communications, which is controlled by his brother Anil.
Mukesh Ambani, chairman, Reliance Industries (RIL), who had started RCom as Reliance Infocomm had ambitious plans for the communications firm, which he was forced to cede to younger brother Anil in the settlement when the group was split.
At the height of the merger talks between Reliance Communications and MTN in June 2008, RIL revisited the Ambani family settlement signed in January 2006 to claim that a decision on a majority stake sale in any of the group companies can be taken only after consultations with the parties involved in the settlement.
In a letter to the MTN board, RIL said that it had the first right of refusal to buy the controlling interest in RCom, negating MTN's right to do so and also informed some of the investment bankers involved in the RCom-MTN negotiations - forcing MTN to back off from proceeding further and going back for a fresh roumd of talks with Bharti Airtel (See: Ambanis brawl over RCom's MTN deal).
Late last month, the long-estranged Ambani brothers agreed to end the agreement that prevented them from competing on each other's turf in a deal that, among other possible outcomes, was seen to pave the way for Reliance Communications to bring in outside investors.(See: Ambanis finally agree to dump old pact, start afresh)
