Rumours abound that MTN Group is conducting due diligence for a “large Mumbai based telecoms firm”, described as a “mega deal”.
Harsh Goenka, chairman of RPG Enterprises, which comprises over fifteen companies in the areas of infrastructure, tyres, technology, and specialty, posted the following note on Twitter on Monday:
However, the talks were put on hold, according to Bloomberg, citing “three people with knowledge of the situation”.
The media house said that MTN had been discouraged by a revision in India of its telecommunications mergers and acquisitions rules.
The Indian commissions approved the proposal to raise the cap on foreign direct investment (FDI) in the telecom sector to 100% from a a prior high of 74%.
International operators had been limited to a 49% holding – rising to a maximum 74% with special regulatory approval from the Foreign Investment Promotion Board (FIPB).
According to Bloomberg, discussions between the two parties centered around MTN taking about a 24% in Reliance Communications, with a market value of about $1.2 billion.
Reliance Communications, which is owned by billionaire Anil Ambani, boasts a customer base of over 130 million, including 7.2 million 3G customers and 29.4 million data customers.
MTN has also previously held talks with Bharti Airtel for a potential R24 billion merger deal in 2009, which was called off.
MTN did not return comment by the time of publication.