Johannesburg - Unions are keeping careful tabs on discussions between South Africa's MTN and India's Bharti Airtel to ensure that job losses don't ensue.
Trade union Solidarity believes that workers' interests could be in the balance if the transaction goes through. Cosatu has also said it will study the deal.
Last week Solidarity, which has members at MTN, sent a letter to the company's chief executive Phuthuma Nhleko, demanding that MTN give the assurance that the planned merger would not result in job cuts.
In May this year Bharti and MTN had announced that they were considering a possible deal worth $23bn-odd, in which they would acquire stakes in one another in an exchange of shares and cash.
In terms of the proposed transaction Bharti would acquire 49% of MTN. MTN and its shareholders would together acquire 36% of Bharti - 25% would be owned by MTN and 11% directly by its shareholders. The companies are expected to announce further details at the end of this month.
According to Solidarity spokesperson Jaco Kleynhans the union is worried that the planned merger could lead to dismissals of MTN workers.
"There have been so many cases where company mergers and the resultant duplication of posts have led to dismissals. This situation must be avoided at all costs and this is precisely the assurance that Solidarity is demanding from MTN," Kleynhans said in a statement.
Solidarity is moreover concerned that the envisaged merger could have a negative effect on service delivery.
"There is a possibility that the merger could lead to the transfer of certain MTN divisions to Bharti, which could put pressure on service delivery in South Africa. South African consumers must not be obliged to accept poor service delivery because of the merger," he declared.
Reuters reports that unidentified sources have revealed that Cosatu is planning to try to block the planned deal.
Cosatu is quietly putting pressure on government to prevent the transaction, a source told the news service. The union apparently does not want a repeat of what happened in the case of the Vodacom-Vodafone deal.
That agreement was almost stopped by Cosatu, which claimed that it was trying to prevent job losses.
According to the source, Treasury would prefer the transaction to go ahead because of the capital inflows it can attract.
Cosatu spokesperson Patrick Craven declined to comment on the rumours, but did say that the union would study the deal.
- Sake24.com
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