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The world’s largest corporate deal in an emerging market, a tie-up worth nearly $50 billion between two telecommunication companies, Bharti Airtel in India and MTN Group in South Africa, came to a screeching halt Saturday.
Bharti called off negotiations after MTN turned Bharti’s takeover plan upside down, proposing to take over Bharti instead. After bankers from both sides agreed in principle to a Bharti-controlled structure on May 16, MTN’s board met this week and proposed a different transaction, in which Bharti Airtel would become a subsidiary of MTN, Bharti said Saturday.
“This convoluted way of getting an indirect control of the combined entity would have compromised the minority shareholders of Bharti Airtel and also would not capture the synergies of a combined entity,” Bharti said in a statement.
“More importantly,” Bharti added, “Bharti’s vision of transforming itself from a homegrown Indian company to a true Indian multinational telecom giant, symbolizing the pride of India, would have been severely compromised.” The situation was “completely unacceptable,” Bharti said.
MTN Group had no immediate comment.
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