Bharti Airtel bids for MTN

Bharti Airtel sets its sights on MENA telecom market with $19 billion bid for MTN

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By  Roger Field Published  May 6, 2008

Bharti Airtel, India's leading mobile operator, has made a $19 billion bid for a 51% stake in South Africa's MTN in a move that could create one of the region's biggest telecom operators, according to the Financial Times.

Bharti Airtel has secured $12 billion of financing to underwrite the deal from Goldman Sachs and Standard Chartered, insiders close to the company told the UK broadsheet.

"We're delighted that they've chosen to talk to us. It confirms Airtel's standing in global telecoms, but whether it will lead to anything, I don't know," Sunil Bharti Mittal, the company's chairman and managing director, told the Financial Times.

Shares in Bharti rose sharply last week after it was first reported that the company was in talks with MTN.

MTN operates in more than 21 countries, including South Africa, Rwanda, Uganda, Swaziland, Cameroon and Nigeria, and a deal between the two companies would give Bharti access to lucrative African and Middle East markets.

A telecoms analyst with consultancy company Frost & Sullivan told CommsMEA that the two companies could make a good fit. "There is a high level of synergies between the companies," he said. "Both operate in emerging markets, both of have followed a mostly low tariff, high volume driven business and the demand for mobile phones is huge in the markets where both companies operate."

But the analyst added that Bharti Airtel's initial bid for MTN is likely to rise, as other operators are also rumoured to be interested in the South African company. "Reliance has said that it is interested and we have heard that Vodafone is interested in MTN," he said, adding that some Chinese operators are also believed to be eyeing a stake in the company.

Merrill Lynch and Deutsche Bank are advising MTN, while Bharti is being advised by Standard Chartered. Singtel, which owns 30.5 per cent of Bharti, is being advised by Goldman Sachs, according to the Financial Times.

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