MTN IN NEGOTIATIONS WITH INDIA’S BHARTI

South Africa's MTN and Indian mobile operator Bharti Airtel said on 25 May they had restarted talks to create an emerging markets telecoms giant with combined revenue of $20 billion.

The deal between MTN and India's Bharti would mean a large net inflow of cash into South Africa, Rand, RMB said on Monday. "The complexity of the deal makes the net currency impact difficult to assess but as far as we can tell the result will be a large net inflow of cash into South Africa totalling around US4 billion," RMB's currency strategist John Cairns said.

Earlier Bharti Airtel and MTN said they were in merger talks. According to the proposed arrangement, New Delhi-based Bharti would acquire a 49 percent share in MTN. In turn, MTN and its shareholders would acquire around 36 percent of Bharti, of which 25 percent would be held by MTN with the remainder held directly by MTN shareholders. The talks revived a deal that Bharti -- controlled by billionaire Sunil Bharti Mittal -- had to abandon in 2008 after differences with MTN over control. Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until July 31, 2009. The parties did not divulge the total value of the deal, although various media reports suggest it is around US23 billion.

Phuthuma Nhleko, chief executive of South Africa's MTN, is one of the country's best-known black businessmen and a consumate dealmaker who has grown the mobile phone group into Africa's biggest. Nhleko, a U.S.-educated civil engineer turned corporate financier and MTN's CEO since 2002, has been instrumental in growing the company into a group with more than 100 million subscribers and operations in 21 countries in Africa and the Middle East. A successful deal between MTN and Bharti would create the world's third-biggest wireless group, with more than 200 million subscribers. Bharti said the potential value of a complex deal in which the firms pay cash and stock for stakes in each other, was more than $23 billion. Talks were still at an early stage.

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