Almost a year after merger and acquisition talks had fallen through between the two telecom operators, Bharti Airtel and the MTN Group have announced the renewal of merger talks: the two telecom companies will discuss potential merger arrangements exclusively till July 31st 2009. Bharti Airtel is the largest telecom operator in India, while the South Africa based MTN Group is active in 21 countries. According to the proposed arrangement, Bharti would acquire a 49% shareholding in MTN, and MTN and its shareholders would acquire an approximate 36% economic interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders: Proposed Scheme of Arrangement -- MTN would acquire approximately 25% interest in Bharti for approximately $2.9 billion in cash and newly issued shares of MTN equal to approximately 25% of the currently issued share capital of MTN. -- Bharti would acquire approximately 36% of the currently issued share capital of MTN from MTN shareholders for a consideration comprising ZAR 86.00 (around $10.36) in cash and 0.5 newly issued Bharti shares in the form of Global Depository Receipts for every MTN share acquired. This, in combination with MTN shares issued in part settlement of MTN’s acquisition of approximately a 25% in Bharti, would take Bharti’s stake to 49% of the enlarged capital of MTN. Each GDR would be equivalent to one share in Bharti and would be listed on the securities exchange operated by JSE Limited, South Africa. -- Bharti would have substantial participatory…
