MTN will have rights to raise economic interests in Bharti

South African firm MTN today said it is currently exploring a potential transaction with Bharti where it would acquire about 36 per cent economic interest in the Indian company, which it may raise further.     

As per the exploring agreement, MTN and its shareholders would acquire an approximate 36 per cent economic interest in Bharti, of which 25 per cent would be held by MTN with the remainder (11 per cent) held directly by MTN shareholders. MTN would also have certain rights to increase its economic interest in Bharti in future, MTN said in a emailed statement.     

Bharti would acquire an approximate 49 per cent shareholding in MTN. Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until 31 July, 2009.     

The transaction, if materialises, would create, a 20 billion dollar behemoth on a subscriber base of 200 million.     

"The potential transaction addresses our strategic imperative of becoming one of the preeminent emerging market telecom companies with leading positions in India, Africa and the Middle East, with no overlapping footprint," MTN CEO Phuthuma Nhleko said in a statement.     

Bharti CMD Sunil Mittal said: "We are delighted at the prospect of developing a partnership with MTN to create a telecom powerhouse in emerging market. Both would stand to gain from sharing each other's practices in addition to savings from enhanced scale."