proposed deal between South Africa's MTN Group and India's Reliance Communications may result in a transfer of Chairman Anil Ambani's two-thirds stake in the Indian firm to MTN, the Economic Times said on Tuesday, citing sources.
That would trigger an open offer from MTN for another 20 percent of Reliance Communications, as Indian law mandates such an offer to shareholders after an acquisition of more than 15 percent of a company.
MTN would become a holding company of India's No. 2 mobile operator, and Ambani would in return get around a third in the South African firm, and keep an indirect holding of nearly 20 percent in Reliance Communications, the paper said, citing sources.
The transaction would be a share-swap deal, the paper said, with the offer to minority shareholders in cash.
“In effect, the Anil Dhirubhai Ambani Group will become the largest shareholder of the combined entity, likely to be christened MTN Reliance,” the paper said, citing unidentified sources.
A spokesman for Reliance Communications declined comment.
MTN and Reliance Communications on Monday said they were in exclusive talks aimed at a potential combination of their businesses, that could create a $66 billion telecoms giant.
Source: Reuters