Bharti Airtel renews acquisition talks with MTN

New Delhi, May 25 (PTI) Sunil Mittal-promoted Bharti
Airtel Monday renewed its effort for acquiring 49 per cent
stake in South African telecom giant MTN and the two companies
have agreed to discuss the potential transaction exclusively
by July 31 this year.

If materialised, the combined entity would have revenues
of over 20 billion dollars and a subscriber base of over 200
million.

"Bharti Airtel Ltd is pleased to announce that it has
renewed its effort for a significant partnership with MTN
Group... Bharti would acquire a 49 per cent shareholding in
MTN and, in turn, MTN and its shareholders would acquire an
approximate 36 per cent economic interest in Bharti, of which
25 per cent would be held by MTN with the remainder held
directly by MTN shareholders," Bharti said in a statement.

Bharti and MTN have agreed to discuss the potential
transaction exclusively with each other by July 31, 2009.

The potential transaction between Bharti and MTN would
create a leading telecommunications service provider group
aligning Bharti's market leading Indian business with MTN's
market leading African and Middle Eastern operations.

Bharti CMD Sunil Bharti Mittal said: "We are delighted at
the prospect of developing a partnership with MTN to create an
emerging market telecom powerhouse. Both companies would stand
to gain significant benefits from sharing each other’s best
practices in addition to savings emanating from enhanced
scale."

"We see real power in the combination and we will work
hard to unleash it for all our shareholders. This opportunity
also represents a first of its kind in developing an
Indian-African initiative that would serve as a shining
example of South-South cooperation," Mittal said.

The broader strategic objective would be to achieve a
full merger of MTN and Bharti as soon as it is practicable to
create a leading emerging market telecom operator which today
would have combined revenues of over 20 billion dollars and a
combined customer base of over 200 million.

The discussions contemplate that the potential
transaction, which would be achieved through a scheme of
arrangement, would include -- MTN acquiring approximately a 25
per cent post-transaction economic interest in Bharti for an
effective consideration of about 2.9 billion dollars in cash
and newly-issued shares of MTN close to 25 per cent of the
currently issued share capital of the South African firm.

Bharti would acquire about 36 per cent of the currently
issued share capital of MTN from MTN shareholders for a
consideration comprising ZAR 86.00 in cash and 0.5 newly
issued Bharti shares in the form of Global Depository Receipts
for every MTN share acquired which, in combination with MTN
shares issued in part settlement of MTN's acquisition of
nearly 25 per cent post-transaction interest in Bharti.

Bharti would have substantial participatory and
governance rights in MTN enabling it to fully consolidate the
accounts of MTN.

Post-transaction, Bharti would have a 49 per cent stake
of the enlarged capital of MTN. Each GDR would be equivalent
to one share in Bharti and would be listed on the securities
exchange operated by JSE Limited, South Africa.

] "Singapore Telecommunications, a major existing
shareholder of Bharti, will continue to be a strategic partner
and significant shareholder after the implementation of the
potential transaction," the Bharti statement said.

MTN's economic interest in Bharti would be equity
accounted and would have appropriate representation on the
Bharti Board, it added. PTI SKB
RAI
NNNN