South African telecom major MTN, which is in talks with India's Bharti Airtel for creating a combined entity worth $23-billion, today said the proposed transaction is compelling as it fits into the company's emerging market strategy.
"The rationale for the transaction is compelling and includes diversification and synergistic benefits as well as addressing the objective of becoming one of the pre-eminent emerging market telecommunication companies," MTN, which announced its interim results, said in a statement.
The South African firm, which has a presence in over 20 countries, said it finds the potential transaction consistent with its stated vision.
"(The potential deal) addresses growth objectives and would also represent a significant development in south-south cooperation between India and South Africa," the statement noted.
According to MTN, no decision or agreement to acquire any shares or GDRs or implement the potential transaction has yet been made by "the boards of either MTN or Bharti".
For the six months ended June 30, 2009, MTN has seen its revenue climb 24.2 per cent to 57.3 billion rand (about $7.28 billion) as compared to the same period a year ago.
The company's subscriber base has shot up 14 per cent to 103.2 million from December 2008.
Both MTN and Bharti had revived the discussions on the possible transaction in May and the "exclusive talks" have been extended for the second time till September 30.
As part of the planned deal, MTN and its shareholders would acquire a 36 per cent economic interest in the Sunil Mittal company, while Bharti would acquire about 49 per cent shareholding in the South African firm.
Out of the 36 per cent of the economic interest, 25 per cent would be held by MTN with the remainder held directly by its shareholders.
