University of Botswana Law Journal - PULP

159
ABSTRACT
MTN & Airtel’s African tryst: The legal angle
S.V. Adithya Vidyasagar*
Bharti Airtel and MTN have been two telecommunication companies that enjoy
a dominant position in India and South Africa respectively. When an alliance
was first proposed between these to companies, everyone in both the countries
went into frenzy as to how the combined entity would be formed, its structure
and the potential benefits this combined entity would provide to its subscribers
and shareholders. When the deal didn’t get through; infact it fell through twice,
it was as if a match made in heavens was not being allowed to be. The primary
logic which perhaps formed the basis of this deal’s failure was that these two
companies were seen in their home territories as prized possessions and their
respective governments were not willing to let them relinquish their national
identities. Keeping this basic premise in mind, this article tries to dwell deep
into the legal issues involved in this deal and how they were instrumental in the
failure of this deal. The three primary legal issues involved in this deal were:
(i) Dual Listing of the combined entity (ii) FDI regime in India (iii) India’s
Takeover Code. All these issues are discussed in detail in Chapter 3 of this
article. Since the deal never actually materialized, the deal structure and the
full monetary aspects of the deal were never disclosed. Hence secondary
sources of information like leading newspapers, journals etc were utilized to
base this article. The complex legal issues involved in this deal have been
analyzed in a simplified manner for the benefit of the general public and to
allow for everyone to appreciate the size and importance of the deal. The main
aim of this article is to allow for the general public to understand the legal
issues which didn’t allow the deal to go through.
INTRODUCTION
Bharti Airtel and MTN have been two telecommunication companies that
enjoy a dominant position in India and South Africa respectively. When an
alliance was first proposed between these two companies, everyone in both the
countries went into frenzy as to how the combined entity would be formed, its
structure and the potential benefits this combined entity would provide to its
subscribers and shareholders.
When the deal didn’t get through; in fact it fell through twice, it was
as if a match made in heavens was not being allowed to be. The primary logic
Company Secretary of the Institute of Company Secretaries of India (ICSI); B.Com LL.B (Hons.)
candidate at Gujarat National Law University, India (Class of 2006 - 2011).