By Adekunle Adekoya, with agency reports
BIDDER for Zain Groupâ€™s Africa operations, Bharti Airtel of India has said that it was not concerned with the ownership tussle in Zainâ€™s Nigeria operations with Econet Wireless, saying it was for Zain Group to settle.
This was disclosed in Barcelona yesterday on the sidelines of the Mobile World Congress which closes today by Bharti Airtelâ€™s chairman, Sunil Mittal. Bharti is offering about $9 billion for Zainâ€™s Africa unit of which Nigeria operations are key. The deal excludes Sudan and Morocco.
CEO of Econet Wireless, Strive Masiyiwa holds on to his firmâ€™s equity in the mobile operator, saying in an interview in Johannesburg that â€œZain Nigeria is not for sale.â€
Officials at Zain declined comments yesterday, in light of litigations by another shareholder, Broad Communications.
Mittal said heâ€™s â€œnot hesitant at allâ€ about the tussle, adding that â€œin the telecom world, litigations are not unusual.â€ By implication, Zain Group is obligated to reach a settlement with Econet Wireless before March 25 when both groups will meet for exclusive talks.
Mittal, who spoke in an interview with Bloomberg Television in Barcelona, said the Zain deal â€œis big, but very straight,â€ compared with its failed bid to acquire the MTN Group last year for $23 billion. Of that, Mittal said:
â€œI think the biggest lesson for us is that a deal can be one of two things: it can be big and needs to be simple, or it can be a complicated deal, but needs to be small. MTN was both big and complicated. Thankfully, this one is big, but very straight.â€
The Zain deal has become crucial to Bharti, as it hopes to add about 42 million subscribers in 15 countries in Africa with the purchase. The financing of the transaction wonâ€™t be a problem, Mittal said.
â€œI canâ€™t give you an assurance that this will not be financed through debt because the financial arrangements for this deal will be laid out in the coming days, or maybe a week or two,â€ he said. â€œEvery time we go for an international acquisition or an attempt to make an acquisition, money is not a problem. The attempts to buy MTN were backed by loans of â€œtens of billions of dollars,â€ he said.
If the deal sails through, Bharti will be assuming a debt of $1.7 billion at Zainâ€™s African operations, and negotiations have reached an advanced stage, with Mittal disclosing that â€œweâ€™re currently in the due-diligence process.â€
Bharti Airtel is Indiaâ€™s largest mobile-phone company, and is making its third attempt to enter the continent.
Slowing sales at home have spurred Bharti to seek access to faster-growing markets. However, since news of the impending deal with Zain hit the financial markets last Monday, its shares have fallen 11.2 percent on the Mumbai bourse.
But Mittal shook this off, saying â€œEvery time someone makes an acquisition, the stock almost always goes down,â€ he said, and added that some of the share price decline can be attributed to investorsâ€™ lack of information on the deal, adding that details will be provided in the coming days.