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India’s RCom, MTN Group call off merger talks owing to ‘legal issues’
Posted by Yogesh on Saturday, 19 July, 2008
MUMBAI (Thomson Financial) – India’s Reliance Communications Ltd. (RCom) said it is unable to conclude its proposed $66 billion merger with South Africa’s mobile operator MTN Group Ltd., “owing to certain legal and regulatory issues”.
RCom said the two parties have mutually decided to call off talks and allow the “exclusivity agreement” to lapse.
On May 26, Anil Ambani-controlled RCom entered exclusive talks to combine with MTN to build a telecoms giant that would reach from Asia to Africa to the Middle East with a market capitalisation of up to $70 billion.
On July 9, both the companies decided to extend the period of exclusivity for their potential merger negotiations till July 21.
Elder brother Mukesh Ambani-controlled Reliance Industries Ltd. (RIL) has been seeking to block the deal, claiming first right of refusal to buy a controlling stake in RCom, based on an agreement dated January 2006.
RIL on Thursday issued a fourth letter threatening legal action against the deal, with Rcom saying the notice was “legally and factually unwarranted”.
Source CNBC
