Reliance in fresh approach to MTN

Tuesday, May 27, 2008

India’s Reliance Communications has made a fresh approach to acquire MTN, reviving its earlier interest in joining up with the South African mobile carrier to create an emerging markets telecommunications giant.

News of the move follows the sudden collapse at the weekend of talks between MTN and Bharti Airtel, India’s biggest cellular operator by subscriber numbers and Reliance’s arch-rival. The talks with Bharti broke down amid differences over how to structure a proposed merger of the two companies.

Reliance declined to comment yesterday. But, like Bharti’s proposed deal for MTN, an offer by Reliance – India’s second-largest mobile carrier and owned by Anil Ambani – was likely to be structured as a merger with the South African operator paid for with cash and shares, people familiar with the matter said.

Reliance last year approached MTN about a possible deal but later withdrew after inconclusive talks. MTN was expected to announce in “a matter of days” the potential partner with which it would pursue talks, one person familiar with the matter said.

Aside from Reliance, Abu Dhabi-based Etisalatthis month said it was considering an offer.

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Source: Financial Times (link opens in a new window)