Bid for MTN: Now, Anil Ambani calls

Anil Ambani's Reliance Comm has begun talks with the MTN Group, days after rival Bharti Airtel pulled out negotiating a possible merger with South African company. HT Correspondent reports.

Anil Ambani's Reliance Communications Ltd. has begun talks with the MTN Group, days after rival Bharti Airtel pulled out negotiating a possible merger with South African mobile phone company.

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Both parties have entered into exclusive negotiations for a period of 45 days. The talks would be related to a potential combination of their businesses, both companies said in separate statements issued on Monday.

“The partnership will provide investors, customers and the people of both companies a unique and global platform for exponential growth,” the Reliance Communications statement quoted Anil Ambani as saying.

A successful merger would create a telecom behemoth with 115 million customers spanning across nearly two dozen countries and a combined annual revenue in excess of $14 billion.

Analysts say Reliance has got enough flexibility to go for a merger, but the deal would be a tough call and would be negative for its shares in the short term.

“It would be a tough call. MTN is not in favour of giving away the majority control. But, Ambanis are aggressive buyers. However, this would be negative for R-Com stock due to the potential debt to the tune of $60 billion,” said Dev Kapadia, analyst with Mumbai-based brokerage firm, Lalkar Securities.