Bharti and MTN scrap merger talks

       India's top mobile company Bharti Airtel on Wednesday called off merger talks with South Africa's MTN Group aimed at creating an emerging market powerhouse, blaming South Africa's political leaders.
       The South African government "has expressed its inability to accept it (the proposed deal) in the current form" and "in view of this, both companies have taken the decision to disengage from discussion," Bharti said in a statement.
       The collapse of the politically sensitive talks marked the second time the two companies had failed to forge an alliance.They called off similar talks in May 2008.
       A merger would have created the world's third-largest mobile operator by subscribers that would have dominated two of the globe's fastest-growing emerging markets - India and Africa.
       Bharti's statement came hours before the expiry of the deadline for conclusion of the exclusive merger discussions,which had already been extended twice.
       The South African government rejected Bharti's allegation it had scuppered the estimated $24-billion deal, saying the move to scrap the talks had been a joint decision by MTN and Bharti.
       MTN said separately that both companies had been unable to strike a deal "within the economic, legal and regulatory framework within which both companies operate."
       It hailed the "positive and constructive" nature of the talks and the "cooperation and supportive approach" of the South African and Indian governments.
       Bharti, which wants to be a global telecoms giant, hung up on talks with MTN in May 2008 after the South African firm proposed an ownership structure that the Indian company said would have made it "a subsidiary of MTN."
       This time, however, Bharti said, the proposed deal recognised both companies as "national champions" and its structure took into account "their leadership in their respective geographies to ensure continuity of business."
       Under the proposed deal, Bharti would have been the biggest shareholder in the new group, taking a 49% stake in MTN while MTN shareholders would have had a 36% stake in Bharti.
       The Indian company said it would "continue to explore international expansion opportunities," without elaborating.
       "Bharti needs to go abroad because it's already the top Indian player," said an industry analyst, who asked not to be named.