May 27 – India’s largest telecommunications company Bharti Airtel has announced plans for a merger with South Africa’s MTN in a US$23 billion deal that would see the business become the world’s largest transnational service provider, with over 200 million customers in 26 countries.
The new company would be the world’s fourth largest telecom entity, and the largest outside China. Only China Mobile, (477 million subscribers), China Unicom (247 million) and China Telecom (237 million) have higher subscriber bases. The merger would be the third largest M&A deal this year to date, and the largest ever for a domestic Indian company.
Under the arrangement, Bharti would purchase 36 percent of MTN’s existing equity from MTN shareholders, while MTN would purchase 25 percent of Bharti’s shares. The deal will give the new company a footprint in 26 countries across Asia, the India subcontinent, the Middle East and Africa.
The previous largest M&A deals this year have both been in pharmaceuticals. Pfizer purchased Wyeth for US$64 billion and Merck acquired Schering-Plough for US$46 billion. The previous largest Indian M&A was Tata Steel’s US$13 billion acquisition of Corus in late 2006.
