MTN, Bharti in discussions over merger

Monday, May 25, 2009

Pretoria - Cellphone operator MTN and Indian telecommunications operator Bharti Airtel Limited have begun discussions over a possible merger.

According to a statement on Monday, MTN said the two companies were discussing the possibility of a merger but this was at an early stage.

"The discussions, which may have a material effect on the price of MTN's securities if successfully concluded, are at an early stage and may or may not lead to any transaction," said MTN.

However, Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until 31 July 2009.

If the deal goes through, MTN would acquire a 36 percent stake in Bharti. Of this amount, 25 percent of the shares will be held by the company and the remainder will be held by MTN shareholders.

The Indian telecommunications company meanwhile will acquire approximately 49 percent shareholding in MTN.

Chief Executive Officer of MTN, Phutumani Nhleko said the cellphone operator was excited about the prospect.

"We are excited at the prospect of teaming up with Bharti, India's number one wireless operator and one of the most strongly capitalised players amongst its emerging market peer group," said Mr Nhleko.

MTN said the proposed deal would not result in job losses, adding that it was committed to implementing its Black Economic Empowerment.

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