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Bharti buying MTN to become fifth largest operator in world ?

Posted by SG on Sunday, May 18, 2008

Bharti Airtel is interested in taking a controlling stake in South Africa’s MTN but it will depend on the price. Apart from pricing Bharti will also have to deal with counter bids from other operators who are also eyeing an entry into the African market. No operator other than Bharti has so far admitted to the interest in the South African company,
Vodafone has even said that it will not bid for MTN.

Meanwhile, Bharti has roped in Singapore Telecom to be part of the discussions with MTN. SingTel holds about 30 per cent stake in Bharti Airtel and would have got involved in any case but sources said that the Singapore-based company may play a more active role. MTN’s market cap of $35 billion compares with $42 billion for Bharti. MTN’s 68 million wireless subscriber base also compares with Bharti’s 62 million.

If the deal goes through then Bharti and MTN would become the fifth largest mobile operator in the world with a significant presence in Africa, India and West Asia. It will also give Bharti a footprint in the African telecom market which has been dominated by local operators and European majors, including Vodafone Group and France Telecom.

One of the key issues for Bharti will be to raise funds for the acquisition. Reports suggest that the company is already in talks with a number of institutions including Standard Chartered, Deutsche Bank and J P Morgan. Bharti may have to cough up as much $20 billion for a 51 per cent stake.

Source:- The Hindu

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