timeline of negotiations MTN-Bharti deal

Bharti Airtel and MTN called off four months of talks the day the exclusive nature of the negotiations lapsed


Tie-up talks to create a global giant in mobile communications ended in failure on Wednesday.

Bharti Airtel, India’s largest mobile operator, and MTN, Africa’s biggest telecom firm, called off four months of talks the day the exclusive nature of the negotiations lapsed. The exclusive talks had been extended twice since they started on 25 May, a year after the two phone firms gave up their first merger attempt.

Both companies are now likely to look for alternative partners.

The talks have broken down over South Africa’s insistence that the shares list on the Johannesburg stock exchange as well — a precondition that could not be met because Indian regulations did not allow it.

In May 2008, Bharti and MTN broke off discussions over the issue of control. This time the dual listing condition proved to be the deal-breaker.

Read below a timeline of negotiations since May 2008

30 Sept 2009: South Africa rejects merger; big setback to Sunil Mittal firm’s ambition of becoming global telecom force. Read story

Quick Edit
One reason to be happy

29 Sept 2009: The extended deadline for exclusivity of negotiations between the telecom groups ends 30 September.

29 Sept 2009: The deal is now believed to be in the hands of politicians, who are broadly supportive of the proposal; if it falls through, the parties may well look at other potential partners.

27 Sept 2009: India’s market regulator should play more of a proactive role than a reactive one and should address issues not using a multiplicity of regulations but with a simplified set of norms.

22 Sept 2009: Amendment of takeover rules by market regulator may determine prospects for proposed telecom deal.

21 Sept 2009: The tangle does point to a problem: Indian companies are trying to globalize at a faster pace than the underlying legal structure, such as capital controls, allows them to.

17 Sept 2009: The Bharti-MTN transaction, which would create the world’s third largest mobile group by subscribers, is subject to an end-September deadline.

16 Sept 2009: Proposed Companies Amendment Bill, Fema need to be changed; deal would also require full rupee convertibility.

Sept 14 2009: Independent Communications Authority of South Africa says it needs to be notified before the transaction is concluded. Read story

13 Sept 2009: Bharti and MTN are in exclusive talks till 30 September for a potential $23-billion deal that would create a combined entity having more than 200 million subscribers.

11 Sept 2009: Cash part up by a third to $10 billion, say sources; Overall package up by 7%; ‘Fair chance’ of getting 75% MTN s’ holder OK: HSBC.

20 August 2009: Exclusivity period extended to 30 Sep; the firms may have given themselves more time to structure the deal.

14 August 2009: Bharti Airtel will have to restructure its operations in India once it signs the deal to eventually merge with MTN so as to separate its Indian operations from the global entity.

3 August 2009: Bharti could increase its cash offer per share to make the deal more attractive.

3 August 2009: Bharti Airtel chairman Sunil Mittal’s willingness to own a lesser stake in a larger company rather than a much larger stake in a much smaller company sets him apart from several other entrepreneurs. Read story

30 July 2009: Four possible scenarios in deal for world’s third largest telecom services provider with at least 200 mn customers.

30 June 2009: The chief executive of MTN’s biggest shareholder, state pension fund Public Investment Corporation said that the fund supported the talks but there was “room for improvement” on the price.

2 June 2009: PIC CEO says supports deal in principle; room for improvement on price, expects further discussion.

26 May 2009: The Bharti Airtel-MTN merger deal is proof of the emerging market multinational, which could avoid the struggles multinationals from the US, Japan and Europe face in emerging markets.

26 May 2009: Bharti says not yet determined how to raise funds; Bharti, MTN shares fall on dilution fears; Pranab Mukherjee welcomes proposed deal.

26 May 2009: If concluded, an RCom-MTN merger — the valuations of the two firms are a combined $66 billion — would be the largest cross-border deal in Indian corporate history.

25 May 2009: Indian telco chalks out complex cash-equity $23 billion deal with African co; target: No. 3 spot in global market.

24 May 2009: Bharti Airtel has pulled out of negotiation for acquiring an estimated $45-50 billion MTN, saying the South African telecom entity deviated from agreed terms.

18 July 2008: Mutual agreement to end exclusive talks comes in face of legal and regulatory hurdles; older Ambani’s claim.

9 July 2008: RCom, MTN had first announced start of a 45-day exclusivity period on 26 May.

13 May 2008: The attempts by Bharti Airtel to reassure investors come on the heels of the company’s valuation dropping $3.33 billion between 5 May and Monday.

5 May 2008: Rival suitors may push up acquisition price; may take up to an year before any progress is made in negotiations.