Bharti Airtel is in exclusive talks to buy for $10.7 billion in cash most of Kuwaiti telecom group Zain's African cellular assets, the Indian firm's third attempt at gaining a foothold in a continent that offers a last opportunity for major subscriber growth.
Bharti, controlled by billionaire chairman Sunil Mittal, and Zain said on Monday the exclusivity period runs until March 25 and any deal is subject to due diligence and regulatory approvals. Mohamed Al Kharafi, chairman of Kuwait's Kharafi group, which owns 11.47 percent of Zain through one of its units, told Indian television he was confident a deal would go through and that an all-cash transaction was planned.
The move by Bharti, which is 30 percent-owned by Singapore Telecommunications Ltd, follows two failed attempts to agree a $24 billion deal with South Africa's MTN Group. Bharti has been hunting for emerging market assets as its home turf becomes fiercely competitive. New entrants into the world's fastest-growing mobile market have triggered a vicious price war which has seen some call charges slashed to a fraction of a US cent. Bharti posted its slowest profit growth in more than three years for the December quarter.
However, Bharti's share price slumped more than 9 percent at the close of the Mumbai market, wiping around $2.4 billion off the firm's market value and marking their biggest daily fall since October 6, amid fears that the Zain deal may prove expensive. Africa represents about 62 percent of Zain's 64.7 million customers, but only 15 percent of its group net profit.
Comments
Comments are closed.