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Bharti plans alliance with Abu Dhabi Group

13 января 2010

Sunil Bharti Mittal, the chairman of Bharti Airtel, India’s largest mobile operator, on Tuesday said he planned to team up with an influential Gulf investment company, the Abu Dhabi Group, to explore possible acquisition opportunities in emerging markets.

Speaking after Bharti announced it would pay $300m for a 70 per cent stake in Warid Telecom, the United Arab Emirates group’s Bangladesh unit, Mr Mittal said the pair could together look at other targets in the Middle East or Africa.

“We are starting a relationship with Sheikh Nahayan Mabarak Al Nahayan of Abu Dhabi and the Abu Dhabi Group, which will retain 30 per cent [of Warid] and still be on the board,” Mr Mittal told the Financial Times, referring to the Gulf investment group’s head. “This will be a good alliance in the Middle East for Bharti.”

An alliance between Bharti and Sheikh Nahayan, a member of the Abu Dhabi royal family and the UAE’s higher education minister, would create a formidable competitor on global telecoms markets.

It would unite the Indian group’s technical expertise in low-cost mobile networks with the spending power of one of the Gulf’s richest states. Bharti continues to harbour ambitions of becoming the biggest international emerging markets telecoms company despite being thwarted from buying MTN of South Africa last year after regulatory objections from Pretoria.

That deal would have been valued at about $24bn and would have created the world’s third largest international telecoms company with more than 200m subscribers in Africa, the Middle East and India.

“We really want to do more things internationally and every time there’s an opportunity we are looking into that,” Mr Mittal said.

Under the deal, Bharti will invest an initial $300m into Warid in exchange for the 70 per cent stake while the Abu Dhabi Group will retain its 30 per cent stake and remain on the board.

The Abu Dhabi Group controls $10bn in investments, including telecoms operations in Uganda and the Congo, according to its website.

The group has a unit in Pakistan but this would be off limits for Bharti – an Indian company.

GV Giri, analyst with IIFL, a Mumbai-based brokerage, said Bharti would need to raise Warid’s revenues of $80m fourfold and lift its profitability amid formidable competition to avoid a dilution of the Indian parent group’s own earnings per share from the acquisition.

But strategically, the deal made sense.

“Bharti’s acquisition of Warid Telecom is a strategic step forward in establishing overseas footprint in a market of some significance in size,” Mr Giri said in a research note.

Источник: Financial Times

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