Anil ambani’s dream ends, talks with MTN called off

Anil Ambani’s Reliance Communications (Rcom) and South African telecom giant MTN on Friday announced they were calling off talks aimed at creating a $66 billion telecom group.

“The two sides were unable to conclude the transaction due to certain regulatory issues,” said a RCOM spokesperson in a statement.

MTN and Reliance Communications started exclusive talks on May 26 and the deadline was extended to July 21.

The extension, announced on July 10, came after a claim on shares in RCom by Mukesh Ambani, estranged brother of RCom chief Anil Ambani, and a sharp drop in share prices created obstacles to completing a deal by the original deadline of July 8.

A deal would have created a $66 billion emerging markets telecom group with operations in about two dozen countries and around 120 million subscribers. When the talks began, MTN had a market capitalisation of $38 billion and Reliance Communications was worth $28 billion, but a sharp slide in markets has eroded valuations.

Mukesh’s Reliance Industries Ltd (RIL) last month wrote to MTN saying that it has right of first refusal over a sale of controlling stake in RCom. Effectively, what Mukesh’s group has said was that any sale of a controlling stake in Reliance Communications to anyone but Reliance Industries was illegal.

MTN in a statement to Johannesburg Stock Exchange said, “With regard to exclusive negotiations relating to a potential business combination between MTN and RCOM, owing to certain regulatory issues, the parties are unable to conclude a transaction. Accordingly, it has been mutually decided to allow the exclusivity agreement to lapse.”

RIL was not immediately available for comments.

THE BIG DEAL

A history of RCom, MTN talks.

• May 13: Bharti says in exploratory talks with MTN
• May 16: Bharti- MTN reach ‘in-principle’ agreement and a term sheet initiated between two lead bankers
• May 21: MTN board meets to consider term sheet. MTN proposes alternate model where Bharti becomes its subsidiary
• May 24: Bharti announces that talks with MTN have been called off
• May 26: RCOM and MTN enter into 45-exclusivity perod for talks to combine both telcos
• June 14: Mukesh Ambani’s Reliance Industries (RIL) entrs fray — claims the first right of refusal in case of sale or change of management of of RCOM
• July 3: RIL calls RCOM for mutual conciliatory talks before initiating formal arbitration
• July 7: RIL says no RCOM representative had turned up for a meeting with RIL
• July 7: RCOM invies RIL to meet in the week beginning July 14 “to clarify any doubts” on the deal structure being discussed with MTN
• July 8: 45-day exclusivity period ends
• July 9: RCOM -MTN decide to extend exclusivity period till July 21
• July 17: RIL starts arbitration proceedings against RCOM
• July 18: RCOM and MTN allow exclusivity period to lapse; end talks

Courtesy :- IBN Live

Ambani rivalry compared to Jeffrey Archer’s potboiler

More than the potential deal between South African telecom giant MTN and Anil Ambani group firm RCOM, it’s the rivalry between the Ambani brothers that has caught the fancy of Western media which compares it to a potboiler penned by fiction writer Jeffrey Archer.

As the time draws closer to the expiry of exclusivity agreement between RCOM and MTN for negotiations, one newspaper after another in Britain and the US is commenting on the eruption of a battle between the two richest brothers in the world.

The controversy over the possible deal started with Mukesh Ambani-led Reliance Industries asserting its Right of First Refusal over the younger brother’s company with legal notices to RCOM and MTN in the midst of negotiation for a deal that could create a 70 billion dollar entity.

While the UK’s The Independent termed it like one of famed novelist Jeffrey Archer’s potboilers, a Financial Times columnist said the spat could make a “passable B movie.” Almost all of them felt it is all about one-oneupmanship between the two.

As The Independent put things in a future perspective, “The next installment in the Ambani saga will show whether the rivalry between the two continues to drive both to still greater achievements – or whether, like a character in a Jeffrey Archer novel, only one can succeed.”

 But tension has been flaring up between the two all the time in these three years (since they parted ways), with both of them trying to steal the show from each other in areas ranging from construction and telecom to entertainment, writes a senior journalist at international business magazine Fortune.

In its write-up, UK’s The Sunday Times said, “What kind of man travels halfway round the world to sabotage the biggest deal of our career… and then threatens you with legal action? For supporters of Anil Ambani, the second richest man in India, the answer is ‘your older brother.”

One of the articles brought about the contrast in the Ambanis’ fight, by touching upon the differences between steel tycoon Lakshmi Mittal and his brother Pramod Mittal, both of whom managed to keep sensitive family issues away from the spotlight.

The Sunday Times says India is “no stranger to sibling rivalry, but this (Ambani) feud has enthralled the country’s business community.” The diverse views are reminiscent of the media’s scrutiny of the Ambani family feud, with writings drawing comparisons on personal fortunes to family fights in India. “My EBITDA is bigger than yours. Is this what the latest spat between the two Ambani brothers boils down to?” questioned a columnist of the British daily Financial Times.

Courtesy :- Economic Times