Sunday, February 14, 2010

Zain - Bharti seals the deal to acquire its African assets

[times live] India's Bharti Airtel, which last year failed in a bid to do business with MTN, has reportedly sealed a $10.7-billion deal with Kuwaiti-owned telecoms operator Zain for most of its African businesses.

Kuwait's state news agency yesterday reported that Zain had accepted the offer, the company earlier confirming it was considering a bid for its African operations. Local newspapers said Bharti was behind the bid, but a Zain spokesman declined to comment and Bharti could not be reached.

The $24-billion tie up between MTN and Bharti collapsed last October after months of negotiations. Bharti blamed the South African government for blocking the deal. It is understood government wanted a dual-listing structure, which the Indian authorities could not approve.

Minister of Finance Pravin Gordhan said MTN chief executive Phuthuma Nhleko and chairman Cyril Ramaphosa had said "the two companies have mutually decided to terminate further discussions", adding that the government was in principle "supportive of local companies that want to grow and diversify offshore from a domestic base".

While government believes deal structures should be left to companies, Gordhan indicated that his approval is needed when companies structure relationships outside the current exchange control regulatory framework.

He did not say whether this approval had been given or denied but said South Africa and India had to work together to develop "mutually beneficial mechanisms for such mergers".

Bharti seal the deal with Zain

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