The Sunil Mittal-helmed Bharti Airtel said on Saturday it has ended merger negotiations with South African telecom major MTN, saying the latter deviated from the agreed terms.
Bharti, India’s leading mobile service provider, said it had reached an in-principle agreement with MTN on May 16.
But later, MTN proposed a different structure that envisaged “Bharti Airtel becoming a subsidiary of MTN and an exchange of majority shares of Bharti Airtel held by the Bharti family and Singtel, in exchange for a controlling stake in MTN”.
Singtel owns 30.5 per cent of Bharti Airtel. Bharti said it couldn’t accept the proposal that appeared to be a “convoluted way of getting indirect control of the combined entity”, which would have become the world’s sixth largest mobile company with over 130 million subscribers in 24 countries.
It “would have compromised the minority shareholders of Bharti Airtel”, the statement said. Also, “Bharti’s vision of transforming itself from a homegrown Indian company to a true Indian multinational telecom giant… would have been severely compromised.”
MTN confirmed talks had broken down. “Discussions were on till late last night without a breakthrough,” MTN spokeswoman Nozipho January-Bardill said.