airtel-mtn merger

8/7/2019 Airtel-Mtn Merger

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` The MTN Group is a 15 year old company and is the largest telecomcompany in South Africa.

` Launched in 1994, MTN Group is a multinationaltelecommunications provider, with its major operations in 21countries in Africa and the Middle East.

` MTN's vision is to be the emerging markets leadingtelecommunications provider. Its strategy is built on three pillars:consolidation and diversification; leveraging our footprint andintellectual capacity; and convergence and operational evolution.

` Shareholdings of the company is widely held by The Mikati Family ofLebanon over 10.18%, employee controlled New shelf 14.87% andGovernment- controlled public investment corporation holdingaround 21%.


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` Bharti Airtel is Indias largest telecom business operator.

` Its CEO is SunilBharti Mittal.

` Currently offering telecom services to over 107 millionsubscribers.

` Provides Fixed wireless services using GSM technology across23 circles.

` Provides Internet Broadband services over DSL in 14 circles.

` The Airtel network spans over 67,138 kms covering allmajor cities in India.


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` Bharti-Airtel plans to acquire 49% of MTN in return for 36%economy stake in Bharti, of which 25% will be held by MTNand remaining 11% directly by MTN shareholders.

` After collaboration, Airtel would have governance rights inMTN, enabling it to fully consolidate the accounts of MTN.

` MTN shareholders have demanded that Bharti-Airtel pay morefor MTN equity.

` MTN will issue new Shares.


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` Bharti-Airtel would acquire 36% of MTNs paid up capital @$ 10.2 per share entailing a cash out go of $ 6.8 billion.

` In returnBharti-Airtel will issue 0.5 GDRs for every MTN

share it acquires.

` The Indian promotors will see a dilution of 45.30% stakes inBharti.


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` Bharti-Airtel is currently into merger talks with Mobiletelephone Networks Group.

` In 2008, along with Bharti-Airtel, Reliance communication was

trying to strike a deal with the MTN Group.

` In the year 2008, talks with MTN failed due to disagreement onthe structure of the deal.

` Talks between the two giants have resumed since 25th May,

2009. This is the second time the two companys have come

together to strike a deal.

` Discussions between the two companies regarding the

potential transactions continues to progress , and the meeting

dates have been extended till 30 september,2009.


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` Government Support:

The governments of both the countries are in favor of thisdeal and are supporting it whole heartedly.

The SOUTH AFRICAN government said that it supportedthe proposal merger ofBharti-Airtel and the MTN group inprinciple.

The Indian Government agreed that a deal like this wouldbe a good example of enhancement of cooperation in trade& investment between two countries.


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` Government Interventions:

Senior officials from South Africa visited India to officers inthe finance ministry, Reserve Bank of India and SEBI. SouthAfrican government stated, that it does not as policy, allow

companies to be incorporated with offshore companies.


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` The talks have run into difficulties as both MTN andBharti-Airtel are insisting on maintaining their

separate identities after the tie up.

` MTN insisted that after merger, Bharti-Airtel shouldbecome a subsidiary of MTN group.

` However Bharti-Airtel supported the deal as it wanted

to become a global company, not a subsidiary.


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` Bharti-Airtel would become the largest stakeholder in MTNgroup.

` A merger entity would have U.S. $20billion in revenue and200 million customers.

` Bharti-Airtel will have governance rights in MTN group,enabling it to fully consolidate the accopts of MTN.

` Bharti-Airtel would become the primary vehicle for theexpansion of bothBharti and MTN group in Asia. WhileMTN would focus on expansion in Africa and Middle East.

` After the merger, Bharti-Airtel will become the 3rd largesttelecom company in the world after Vodafone and ChinaMobile.


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Shubham BhatnagarMBA Section B

Enrollment No. - 121

airtel-mtn merger

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