S Africa's MTN ends talks with RCOM
The war between the Ambani brothers has derailed what could have been the biggest merger in Indian corporate history. On Friday, Anil Ambani’s Reliance Communications (RCom) and South African telecom giant MTN called off merger talks due to “legal and regulatory issues”.
Had the merger materialised, it would have created a $70 billion ( Rs 2.8 lakh crore) telecom giant with over 115 million subscribers across 23 countries.
The curtains came down on the deal after Reliance Industries, controlled by Anil’s elder brother Mukesh, started arbitration proceedings against RCom over the proposed merger.
Anil intended to hand over part of his RCom shares to MTN in return for a stake in the South African telecom major. Mukesh had claimed that Reliance had first right to the shares Anil intended to hand over.
“Owing to legal and regulatory issues, the parties are presently unable to conclude a transaction,” said an RCom statement.
RCom and MTN were engaged in a 45-day exclusive negotiation from May 26, which was extended by two weeks on July 9.
The collapse of the talks is likely to intensify the war between the Ambani brothers, according to sources close to them.
Now, the buzz is that MTN may resume talks with RCom’s rival Bharti Airtel. Airtel too had been in merger talks with MTN, which ended on May 24 over management issues.