India's RCom and SAfrica's MTN call off merger talks

NEW DELHI - Indian mobile phone group Reliance Communications and Africa's largest cellular firm MTN have called off talks for a tie-up because of legal and regulatory issues, the companies said.

By (AFP)

Published: Sat 19 Jul 2008, 3:15 PM

Last updated: Sun 5 Apr 2015, 12:53 PM

The companies have agreed to allow an exclusivity agreement to lapse, MTN said in a statement to the Johannesburg securities exchange late Friday.

The two companies entered into exclusive negotiations in late May after MTN's talks with India's biggest mobile operator Bharti collapsed over an ownership structure proposed by the South African firm.

Reliance, controlled by billionaire Anil Ambani, and MTN this month extended the deadline for talks to July 21 as a previous deadline expired on July 8.

A partnership could have created an emerging market powerhouse worth up to 70 billion dollars and with a 116 million subscriber base across the globe, eclipsing most Western mobile phone businesses.

Indian financial newspapers last month reported that RCom and MTN were close to a share swap deal and that talks were at an advanced stage, but the deal seemed to be threatened by a family feud between Anil Ambani and his brother.

The latest development came after the dispute between Anil Ambani and elder brother Mukesh escalated, with arbitration proceedings launched against Reliance Communications.

Mukesh Ambani, who controls India's largest private firm Reliance Industries, claims a right of first refusal over any plan to sell out by Reliance Communications. But Anil Ambani has strongly refuted the claim.

The billionaire brothers fell out and their family conglomerate broke up after the death of their father Dhirubhai in 2002.

Reliance Communications firm is the flagship of Anil Ambani's group and has 48 million subscribers. MTN, which has 68 million subscribers, is Africa's largest cellular operator.

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