New Delhi, March 25: Shares in Indian mobile giant Bharti Airtel jumped nearly two percent Thursday on news it was close to clinching a 10.7-billion-dollar deal to buy the African assets of Kuwait’s Zain Telecom.
At a board meeting Wednesday, Zain cleared the sale of most of its African businesses to the Indian company led by billionaire Sunil Bharti Mittal, according to a source with knowledge of the proposed transaction.
“Developments are positive,” the source told AFP.
The New Delhi-based company, which has made two previous unsuccessful attempts to enter the high-growth African market, was up 1.87 percent at 312.55 rupees in morning trade.
The agreement, which would be the second largest foreign takeover in Indian corporate history, values Zain’s African assets at nine billion dollars.
Bharti will also take on 1.7 billion dollars of debt.
“Due diligence has been taking place right down to the end,” another source told.
Bharti declined to comment on reports that an agreement was imminent but a spokesman said a statement could come later Thursday or on Friday.
The exclusive talks period agreed by the two companies in mid-February was due to end Thursday.
Last weekend, Bharti said it had raised 8.3 billion dollars to finance its proposed takeover, adding the “financing was oversubscribed, with major international banks committing to underwrite the total amount.”
The takeover would give Bharti a significant foothold in the African cellular market, where just 36 out of every 100 people own a mobile phone.
The company has been looking abroad for subscribers as competition heats up in India’s congested mobile market. It tried and failed twice to forge a deal with South Africa’s MTN.
If the deal goes through Bharti, which already has 125 million Indian subscribers, would get 42 million subscribers in 15 African countries from Burkina Faso to Zambia.
The offer marks the third attempt by Bharti founder and chairman Mittal to get a foothold in Africa after the collapse of two efforts to tie up with South Africa’s MTN and create an emerging market powerhouse.
But the takeover will require all of Mittal’s legendary Midas touch as he struggles to turn around Zain?s underperforming operations, particularly in Nigeria, the company?s key market.
—Agencies