AZB has consistently acted as Bharti's advisors on their cross-border acquisitions. At $10.7 billion, Bharti will be paying about $250 (Rs. 11,600) for each of Zain’s 42 million African customers. However, some companies are objecting.
The Zain Telecommunication Board that met yesterday has agreed to negotiate exclusively with Bharti Enterprises till March 25. Bloomberg reports that the $10.7 billion (Rs. 49,629 crore) for Zain’s assets in 17 African countries, would create one of the largest operators in the emerging market. The deal reportedly does not include Zain’s Moroccan or Sudanese operations, and is subject to due diligence and regulatory approval.
At $10.7 billion, Bharti will be paying about $250 (Rs. 11,600) for each of Zain’s 42 million African customers. When the Vodafone Group had paid $10.7 billion in May 2007 to buy a controlling stake in India’s Hutchison Essar Ltd., each Indian subscriber was valued at about $720 (Rs 33,400).
However, as things stand, the acquisition of the Kuwait-based Zain’s African operations might be more complicated than expected. Financial daily, Economic Times reports that a minority shareholder from Zain-Nigeria has already succeeded in obtaining a temporary injunction against Zain from managing the unit. South Africa based Econet Wireless, Broad Communications have long standing disputes with Zain which will have to be settled before this acquisition can go through.
2010, like 2009, has been busy so far, with a successful beginning for Bharti and for AZB in the telecom space. AZB's biggest coup, of course, would have been the Bharti-MTN deal. Bharti Airtel's bid to buy South African telecom giant MTN was valued at a whopping $24 billion (1,15,000 crore), with AZB acting as Bharti's Indian advisors. The AZB team, led by Partners Ajay Bahl and Gautam Saha, structured and restructured multiple documents, but after months of negotiations between the two companies, the deal fell through due to regulatory concerns.
Bharti started this year buying a 70 percent stake in the Bangladesh telecom company, Warid Telecom. Abu Dhabi based Dhabi Group, sold 70 percent equity stake to Bharti for $ 300 million (Rs. 1,390 crore). The Delhi office of AZB led by Gautam Saha advised Bharti on its first international acquisition.
If the Zain deal goes through along with Reliance buy of LyondellBasell, AZB would have acted on all of the India’s largest successful cross border acquisition, with the Tata’s Corus buy topping the tables with $12 billion.