Bharti MTN deals falls apart

By abhishek at 30 September, 2009, 2:32 pm

Bite more than you can chew and then chew it; Plan more than you can and then do it. All along, that seemed to be the story of the $24 billion proposed merger of Bharti and MTN or so we thought. Two days ago, a headline on the front page of Business Standard read – ‘Bharti MTN deal ready to be signed.’ Today, MTN’s decision to pull out only proves that either the media is irresponsible and suffers from premature ejaculation or business deals as big as these are as mercurial as the Indian monsoons. In this case, a bit of both is correct.

When a South African major invites an Indian company to buy into it, it’s a first on many counts. This would have been the biggest merger in Indian history beating Tata Corus and hence the highest outflow of Foreign Direct Investment (FDI) from India to an overseas country. Bharti was to add 22 million subscribers overnight. All this while our neighbours from the north - China felt a bit left out for not having its name all over a telecom venture of this magnitude. But may be we just picked a wrong country to deal with or was it vice versa?

Tomorrow’s papers will be awash with reasons as to why the arrangement fell off inspite of Dr Manmohan Singh backing it to the hilt with his counterpart, Jacob Zuma. Some say that MTN insisted on a ‘Dual listing’ policy where the same company will be split into two like Siamese twins and will have their own separate set of shareholders. In effect, it means two different lives which by the way the Indian government had no objection to. We may end up finding a good “business reason” to rationalize this fall off, but when two governments get involved in decision making for a executing a business proposal, you know it’s nothing but politics gone awry!

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