Deal with MTN to have positive impact on Bharti: Macquarie
Bharti Airtel's proposed mega-deal with South African wireless services provider MTN is likely to have a positive impact on the domestic telecommunication player, global research firm Macquarie says.india Updated: May 29, 2009 21:35 IST
Bharti Airtel's proposed mega-deal with South African wireless services provider MTN is likely to have a positive impact on the domestic telecommunication player, global research firm Macquarie says.
The deal valuation implies superior multiples for Bharti as against MTN and Bharti is also getting a high-growth asset at a far lower valuation than itself, according to a Macquarie research report.
"In our view, three key positives on the deal are that firstly, Bharti is getting a significant premium, secondly, the deal would significantly expand Bharti's geographical footprint in emerging markets and thirdly Bharti will get control of 49 per cent of MTN vs MTN's ownership of 25 per cent in Bharti," Macquarie said.
On May 25, Bharti Airtel announced the renewal of talks for acquiring a 49 per cent stake in South Africa's largest wireless service provider MTN. The deal would involve a complex structure in which both the entities would pay cash and stock for stakes in each other.
The two companies have signed an agreement to hold exclusive talks for a deal that could include USD 10 billion in cash and USD 13 billion in shares and see emergence of a combined entity of USD 20 billion in terms of revenue and 200 million subscribers globally.