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Johannesburg - Talks between Indian telecommunications leader Bharti Airtel and South Africa's MTN Group collapsed Wednesday after four months of negotiations over a possible merger, officials said.
The talks could have opened the way for the creation of an emerging markets mobile phone giant with $20bn in combined revenues and a subscriber base of over 200 million.
Bharti put the blame on South Africa, saying in a statement that the government "has expressed its inability to accept" the structure of the merger.
"In view of this, both companies have taken the decision to disengage from discussion," it continued. "We hope the South African government will review its position in the future and allow both companies an opportunity to re-engage."
The two companies are both leaders in their respective markets, and Bharti said it would continue to "explore international expansion opportunities".
Bharti officials declined to provide further details on Wednesday night.
South Africa's National Treasury said in a Wednesday statement that MTN executives met with Minister of Finance Pravin Gordhan Wednesday morning and told him the two companies called off talks because "they were not able to conclude all outstanding matters to enable the transaction to proceed".
The statement added that the deal involved foreign exchange and other regulatory issues that required special approval from the minister of finance.
When talks began in May, Bharti said it aimed to acquire a 49% stake in MTN, while MTN and its shareholders would have taken a 36% stake in Bharti through a complex cash and equity deal.
It was not the first time the two companies had come to the table only to see talks break down. Negotiations between Bharti and MTN over a possible merger first foundered in May 2008.
MTN then opened talks with India's Reliance Communications, but those talks collapsed two months later.
- Sapa
