LEAPS AND BOUNDS

With the markets still recuperating from the after shock of global meltdown, it had been praying for a miracle to set the pace going again and it seems to be, that those prayers might just have been answered.

India’s largest Telco Bharti Airtel on Monday said it is in talks to acquire a 49% stake in Africa’s largest Telco MTN to create an entity stretching from the Cape of Good Hope across the African continent, West Asia and the Indian Subcontinent with revenues of about $20 billion and over 200 million subscribers. The combined entity will be amongst the top five operators globally. With this deal, the new entity will cover almost 24 countries, most of them categorized under high-growth geographies. Since there is a synergy between the strategic intent of Bharti and MTN, hence they will complement each other in achieving the necessary mandate.
According to sources: The South African Telco will get a 36% economic interest in Bharti in return for offloading the minority stake. The deal size is estimated to be worth over $23 billion.

This proposed merger with Africa’s MTN group will create a telecom giant, fourth largest in terms of subscribers, among the global telecom companies.
Recently, Bharti Airtel announced that its mobile phone subscriber base had crossed the 100 million mark, making the company world’s third largest single country service provider. Little did the world know that in one big leap, the telecom giant would consider doubling the subscriber base with a merger.

With this deal showing signs of near completion. The newly merged companies can divide their growth strategies with MTN pursuing expansion over Africa and the Middle East; bharti airtel can drive growth in Asia and India.

According to sources it is said that  Standard Chartered is advising Bharti while Bank of America ,Merrill Lynch and Deutsche Bank are advising MTN.The merger will be India’s biggest-cross border deal, eclipsing Tata Steel’ acquisition of Anglo-Dutch steel major Corus for $12.2 billion in 2006.
Bharti and MTN have agreed to hold exclusive talks with each other till July 31, 2009. As per Bharti’s disclosure to the stock exchange MTN would hold 25% in the Indian Telco after the deal, while the re-mainder would be held directly by MTN shareholders.

With this deal having hit the rocks before due to differences in thinking0, here’s hoping for a breakthrough between these telecom giants which will not only help invigorate the sluggish Indian market but will also have a positive impact on the world market as well.

Noorie Fathima, Student Representative, Colossus

About fathimaspeaks

I'm a vivid dreamer,i like voicing my thoughts, like to be out of the box sought of a rebel you might say,I like being around people,appreciate good sense of humour and detest hypocrisy and heavy sarcasm.
This entry was posted in Colossus. Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s