Becoming the world's fifth largest mobile operator, Sunil Mittal led Bharti Airtel on Tuesday announced that it had completed the acquisition of Zain Telecom's Africa operations for $10.7 billion.
The company has now 180 million subscribers in 18 Asian and African nations. The company announced that it would launch the Airtel brand in Zain's operations in all the 15 nations in October.
Announcing the completion of the deal at a press conference here, Bharti group Chairman Sunil Mittal said “the transaction is the largest ever cross-border deal in an emerging market and will result in combined revenues of about $13 billion.''
Bharti finally entered Africa after aborting negotiations twice for merger with MTN since 2008, with Mr. Mittal stating that in the Zain's case Airtel would have a total control.
He said Zain Africa would now be 100 per cent subsidiary of Bharti International. This deal would signal many new investments that would go to Africa, he added.
At present, China Mobile is the world's largest mobile player with a subscriber base of 522 million, followed by Vodafone (348 million), Telefonica (206 million) and American Movil (201 million).
Elaborating on Africa strategy, Bharti's international operations in-charge Manoj Kohli said the company had set a target of 100 million subscribers and $5 billion revenues by 2012-13.
Bharti has acquired Zain Telecom's operations in 15 African nations, excluding Sudan and Morocco. Zain has operations in 17 countries in the region and is claiming to be the second largest operator after MTN.
Asked whether he regretted missing a deal with MTN twice and whether that was his first choice, Mr. Mittal said “MTN was the first opportunity that was available at that time. In MTN's case, we would have had board control but no management control and no change in brand.
“There were compromises to be made (in MTN). Zain is the second largest operator and that is the only difference. But we will have full control and our own brand.''
“With this acquisition, we will have an unparalleled footprint in one of the fastest developing regions in the world. We are looking at more opportunities as we build more roll outs in Africa,'' he remarked.
The company has also reached a settlement with Broad Communications, the single largest shareholder in Zain Nigeria, following which its chief Otudeko would now head Bharti's operations in Nigeria.
“There is no extra payment made for the settlement. The company does not see any problem with another small shareholder Econet Wireless in Nigeria.
For completing the deal, Bharti paid $7.9 billion and the balance $400 million from the total upfront payment would be done in a few days on completion of certain formalities,'' Mr. Mittal said.