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Reliance, MTN on verge of tie-up.

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Reliance Communications of India (RCom) and South Africa's MTN have agreed "broad contours" of a deal to create a global telecoms powerhouse but are still working out share-swap details, a report has claimed.

Under a deal, RCom would become the largest single shareholder in MTN and the South African giant would be the biggest holding company of the Indian telecoms firm, India's Economic Times said. "Both parties are learnt to have agreed on the broad contours of the deal," the newspaper said, citing unidentified sources. A spokesman for RCom, India's second largest mobile firm, declined to comment on the possible tie-up, which would create

a 116 million subscriber base, eclipsing most Western mobile phone businesses.

However, the two sides have yet to decide the share-swap ratio under which RCom chief Anil Ambani would transfer his stake in the Indian company in return for a holding in MTN, the newspaper said. Ambani wanted 66 MTN shares for 100 RCom shares while MTN was seeking 51 MTN shares for 100 Reliance Shares, the report said, adding that a top RCom team was at MTN's headquarters and was due back today.

In addition, the two sides were discussing the post-merger firm's management structure, with both wanting to keep their top personnel in "most geographies," the newspaper said. RCom entered tie-up talks with MTN late last month after rival Bharti Airtel, India's largest mobile firm, hung up on discussions with MTN in a dispute over control.

Mohammed Omran, chairman of UAE operator Etisalat, also said last month that he was evaulating a bid for MTN.

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Publication:7 Days (Dubai, United Arab Emirates)
Date:Jun 10, 2008
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