Reliance confirms talks with South Africa’s MTN (Lead)May 26th, 2008 - 7:09 pm ICT by admin
Mumbai, May 26 (IANS) The Reliance Anil Dhirubhai Ambani Group formally said Monday it is in consolidation talks with the South African telecom services giant MTN, just two days after the Bharti group ended its negotiations. “Reliance Communications and the MTN group have agreed to enter into exclusive negotiations with respect to a potential combination of their businesses,” the Mumbai-based group’s telecommunications arm said in a statement.
The group said the two entities had also agreed upon a 45-day exclusivity period to work out the modalities, during which neither party would be able to negotiate with any other entity.
“There is no certainty either on completion, or the timing of the said proposal. In the meantime, shareholders are advised to exercise caution in their dealings in the companies’ dealings until a further announcement is made,” the group’s statement said.
Reliance is looking at MTN’s 70 million customers in 21 countries, including South Africa, Nigeria, Iran and Cyprus and its attractive balance sheet that shows a net profit of $1.58 billion on revenues of $9.62 billion.
The Anil Ambani-led company also has in its fold 48 million customers, covering 15,000 towns and 400,000 villages in India on a network of 165,000 km of optic fibre cables.
“We are delighted to be engaged in exclusive negotiations with MTN group to achieve a partnership, which would provide investors, customers and the people of both companies a unique global platform for exponential growth, creating substantial long-term shareholder value,” Ambani said.
The discussions between Bharti Airtel and MTN group to create the world’s sixth-largest mobile phone company in a deal said to be worth $45 billion was formally called off Saturday.
“Discussions were on till late last night without a breakthrough. Accordingly, Bharti has decided to disengage from the ongoing talks and has conveyed the same to MTN,” the company, promoted by Sunil Bharti Mittal, had said Sunday.
The two companies were unable to come to an understanding on what the structure of the new enterprise will be, Bharti officials said. “MTN has now presented a completely different structure from what was agreed.” the company said.
Reliance marked its entry into the international mobile phone market by buying out Uganda’s Anupam Global Soft to offer mobile, fixed-line, Internet, national and international long distance services there.
The group also made a commitment to invest $500 million there towards expansion.
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