India’s top mobile firm Bharti Airtel and SA cellular flagship MTN are ready to sign a tie-up deal but regulatory issues could stymie a final agreement, reports said Monday.
“The deal is all set, agreed and legally ready to be signed,” the Business Standard newspaper quoted an unnamed source close to the negotiations as saying.
But the Business Standard and The Economic Times say a final agreement could be blocked by the issue of whether India would allow the merged company to be listed on both the Indian and SA stock exchanges.
A dual-listed company involves two listed companies that have different sets of shareholders but share ownership of a single business operation. SA allows dual listing while India does not.
The SA government, which indirectly holds more than 21% in MTN, said earlier this month it was unwilling to sacrifice the firm’s “SA character” and raised the possibility of dual listing as a compromise.
Indian media reports say the two firms have worked out details of the proposed US$23bn cash-and-share swap deal. The merged company would have more than 200m subscribers and $20bn in annual revenues.
But allowing dual-listed companies would involve substantial changes in India’s foreign exchange and stock market laws and full cabinet approval, the reports said. A Bharti Airtel spokesman had no comment.
The Economic Times said the issue was expected to be raised at a meeting between Premier Manmohan Singh and SA President Jacob Zuma on the sidelines of a G20 summit in the US city of Pittsburgh this week. The newspaper said Singh was likely to indicate the Indian government’s support for the deal but added it was unclear whether he could give any assurance on changing India’s legislation to allow dual-listed companies.
The Economic Times quoted Vincent Magwenya, a spokesman for Zuma, as saying the deal’s future was dependent on whether “all regulatory requirements and other considerations in both countries” could be met. — Sapa-AFP