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BHARTI & MTN DEAL

MADE BY: MANAV
BADHWAR
BHARTI & MTN DEAL
 Bharti Airtel ltd, India’s biggest mobile
company & MTN group ltd of south Africa
extended talks for a multi-billion-dollar
merger for making the world’s third
largest mobile phone operator in the
world with over 200 million subscribers.
BHARTI & MTN DEAL

ON 25th AUGUST 09
MTN ceo Phuthuma Nhelko & Bharti Airtel

Chairman Sunil Mittal met finance minister

Pranab Mukherjee & minister for corporate

Affair Salman Khursheed for the matter of

issuing a crucial clarification on GDRs.


BHARTI & MTN DEAL
If MTN wants to convert Bharti Airtel GDRs
Into equity shares with voting rights . It

Would be required an open offer. Bharti

Proposes to issue 25% equity through

GDRs to MTN while an additional 11% will

Be held by MTN shareholders.
BHARTI & MTN DEAL

ON 28th AUGUST 09
Bharti & MTN were close to the agreement

Bharti was offering MTN shareholders

$13.1billion(nearly Rs 64,200 crore) in

cash & shares for a 49% stake &

Shareholders will also receive GDR worth

$5.7 billion in total.
BHARTI & MTN DEAL
On the other hand , MTN is offering Bharti
$10.5 billion for 36% stake in Indian

Operator. $2.9 billion will be in cash &

Remaining $7.6 billion will be in shares.

The total value of the deal amounts to

$23.6 billion figures announced by the two

Companies.
BHARTI & MTN DEAL
1. Public investment Corp.ltd , a powerful
body controlled by South African govt
holds 20% stake in the MTN.
2. Lebanon’s Mikati family owns 10% in
MTN.
3. SingTel holds 45% in MTN.
BHARTI & MTN DEAL

ON 10th SEPT 09
Bharti & MTN merger reach $24 billion

Merger pact. Bharti was to give $4 billion

To two MTN shareholders , M1 group &

Public Investment Corp. ltd
BHARTI & MTN DEAL
SEBI would be changing a key component
Of its takeover norms .SEBI said that

Buying offshore in GDRs & ADRs with

Voting rights issued by an Indian firm

would have to make an open offer to buy

An additional shares. MTN will have to pay

$6.6 billion for buying additional 20% stake

In Bharti to make open offer .
BHARTI & MTN DEAL
 Bharti –MTN deal hinges on SA stance.

SA stances were demanding for dual listing
Of a merged entity.

75% of MTN shareholders according to south
African law have to Accept all the details &

Changes are Incorporated.


BHARTI & MTN DEAL

ON 1st OCTOBER 09
 Bharti & MTN deal went off
 What went wrong ?
1. India’s inability to allow dual listing of a

merged entity that may have addressed
 South African concerns.
2. SEBI change rule on GDRs that may have

forced MTN into unexpected additional
expenditure on making open offer for Bharti
shares.

BHARTI & MTN DEAL
 3. MTN minority shareholders were backing
the deal. Investors were offered
 cash to GDRs as security that means
 investors selling other assets to comply
 with limits.