Finally...Bharti MTN deal falls apart!!
Today at 19:48pm IST, Bharti Airtel called off the much hyped $23 billion deal for the merger with South Africa's MTN after a nearly exhausting 4 month long discussion process in which even the key cabinet ministers and the Indian PM and the neighbouring dog were pushing for the deal.
This was the second time in the year Bharti has had to taste dirt in its quest for becoming a dominant player in the world telecom market (geography and customer number wise). It was going to be a very complex deal with which the South African government was not very comfortable with. As per the proposed structure, Bharti would have acquired 49% stake in the deal while MTN would have acquired 36% stake in Bharti Airtel. Both the share holders were not happy with deal primarily the Bharti share holders. And this was apparent enough. What with the much delayed 3G auction coming up in India as well as the MNP to go live by the year end, the capex pressure on India's largest telecom player was huge not counting the conclusion of the deal. As a result, Bharti's stock fell on Monday. I dont see any short term gains for Bharti in this deal but only heartache.
The long term benefits of this deal were there for Bharti to move away from the stagnating Indian market but again these are the projections of the so called analysts. We all have seen what happened to the World economy when the analysts were predicting the economy to hit the sun & moon.....
This was the second time in the year Bharti has had to taste dirt in its quest for becoming a dominant player in the world telecom market (geography and customer number wise). It was going to be a very complex deal with which the South African government was not very comfortable with. As per the proposed structure, Bharti would have acquired 49% stake in the deal while MTN would have acquired 36% stake in Bharti Airtel. Both the share holders were not happy with deal primarily the Bharti share holders. And this was apparent enough. What with the much delayed 3G auction coming up in India as well as the MNP to go live by the year end, the capex pressure on India's largest telecom player was huge not counting the conclusion of the deal. As a result, Bharti's stock fell on Monday. I dont see any short term gains for Bharti in this deal but only heartache.
The long term benefits of this deal were there for Bharti to move away from the stagnating Indian market but again these are the projections of the so called analysts. We all have seen what happened to the World economy when the analysts were predicting the economy to hit the sun & moon.....
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