Bharti Airtel said that it is exploring a potential transaction whereby the telecom company would acquire 49% stake in South Africa’s MTN Group and, in turn, MTN and its shareholders would acquire an approximate 36% economic interest in Bharti — of which 25% would be held by MTN and 11% by its shareholders.
Bharti expects to pay ZAR86 in cash and 0.5 newly issued Bharti shares in the form of Global Depository Receipts for every MTN share while MTN would pay $2.9 billion for its stake in Bharti.
This transaction is expected to create a telecom group serving the large populations of Asia, Middle East and Africa. Bharti is expected to the be the primary vehicle for both Bharti and MTN to pursue further expansion in India and Asia while MTN would be the primary vehicle for both Bharti and MTN to pursue further expansion in Africa and the Middle East.
Bharti said that Singapore Telecommunications, a major existing shareholder of Bharti, would continue to be the strategic partner and significant shareholder after the implementation of the transaction.
Sunil Bharti Mittal, chairman and managing director of Bharti, said: “We are delighted at the prospect of developing a partnership with MTN to create an emerging market telecom powerhouse. This opportunity also represents a first of its kind in developing an Indian-African initiative that would serve as a shining example of South-South cooperation.”