The largest deal that SA is likely to see this year, a potential merger between MTN and India's Bharti Airtel, is expected to go ahead.
On Saturday, treasury officials returned from a visit to India. The outcome of meetings the team had with Indian regulatory officials on the $23 billion deal is not yet known.
“Our team arrived back from India on Saturday night. They will be briefing the minister [of finance] some time this morning,” says Thoraya Pandy, head of media and communications at the National Treasury.
Local analysts expect the deal to proceed. Chris Gilmour, analyst at Absa Investments, says: “I don't think that they'll go this far down the track and let it drop.”
He points to the fact that Bharti has already sweetened its offer to MTN shareholders, and that there seems to be commitment from the Indian government to making the deal happen.
Regulatory issues
However, there is still an issue with MTN taking up a dual listing in India, which would require a change in legislation. A dual-listing structure would allow the companies to maintain separate shareholders, but combine cash flows and operations.
She points out that India and SA have been forging business ties and both countries are keen to support business ventures.
MTN is expected to make an announcement at the end of this month, which will either give the market clarity, or extend the deadline for exclusive talks yet again.
Closely guarded secret
The Wall Street Journal, citing sources close to the deal, says Indian and South African officials have been working towards an arrangement that would allow the proposed merger to proceed.
It says both companies have agreed on an arrangement in which each would take a large stake in the other and eventually merge to create the world's third-largest wireless operator by subscribers.
However, the Journal points out, the deal is now in the hands of political negotiators, and allowing for a dual-listed structure would require changes to Indian corporate law. However, it quoted Indian prime minister Manmohan Singh as saying he supports the deal.
MTN did not respond to a request for comment this morning.
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