Bharti, India’s largest mobile operator, has confirmed it is back in merger talks with the South Africa-based MTN Group, a year after the two parties called off earlier negotiations. The latest proposal would see Bharti acquire a 49 percent shareholding in MTN, while MTN and its shareholders would acquire an approximate 36 percent stake in Bharti, of which 25 percent would be held by MTN with the remainder held directly by its shareholders. The merger would create a telecoms group with combined revenues of over US$20 billion and a customer base of over 200 million, which would combine Bharti’s market-leading Indian business with MTN’s various business units across Africa and the Middle East. The operators have entered an exclusive period of talks that will last until 31 July, though Bharti noted in a statement that “discussions are at an early stage and may or may not lead to any transaction.” A Reuters report valued the merger at US$61 billion.

Last year’s talks reportedly broke down over Bharti’s refusal to become an MTN subsidiary. However, this time the two parties have communicated specific details of how the merged entity would work. According to Bharti’s official statement, MTN will acquire its 25 percent stake in Bharti for an estimated US$2.9 billion in cash and newly-issued shares of MTN equal to approximately 25 percent of the currently issued share capital of MTN. Meanwhile, Bharti would acquire approximately 36 percent of MTN’s existing shares at ZAR86 (US$10.4) per share plus 0.5 newly-issued Bharti shares in the form of Global Depository Receipts (GDRs) for every MTN share acquired. When combined with the new MTN shares issued as part of its 25 percent stake, this would lift Bharti’s stake in MTN to 49 percent. Bharti said that it would be the primary vehicle for both Bharti and MTN to pursue further expansion in India and Asia, while MTN would be the primary vehicle for both operators in Africa and the Middle East. The statement noted also that Bharti would have “substantial participatory and governance rights in MTN, enabling it to fully consolidate the accounts of MTN”, while MTN’s stake in Bharti would be “equity accounted and would have appropriate representation on the Bharti Board.”