Bharti Airtel, India's largest mobile services provider, and MTN Group of South Africa, have again extended their discussions for a partnership until Sept. 30, indicating that a tie-up remains elusive a year after talks broke down.
The talks have run into difficulties because both MTN and Bharti Airtel insist on maintaining their separate identities after a tie-up, according to informed sources. The two companies said in May that a merger was a broad strategic objective.
MTN shareholders have also demanded that Bharti Airtel pay more for MTN equity, according to these sources.
In a filing to the Bombay Stock Exchange on Thursday, Bharti Airtel said that the period for these talks had been extended to Sept. 30. The company did not give any reason for the extension.
"Discussions between the parties regarding the potential transaction continue to progress satisfactorily," according to the filing.
Earlier this month, the two companies had announced that the period for talks had been extended from July 31 to Aug. 31.
In May, the companies announced a cash and stock deal where Bharti Airtel would acquire 49 percent of MTN's shares. MTN and its shareholders would get a 36 economic stake in Bharti Airtel.
Together, the two companies will have US$20 billion in revenue and 200 million customers, Bharti Airtel said in May. Under the arrangement, Bharti Airtel will have governance rights in MTN, enabling it to fully consolidate the accounts of MTN.
Bharti Airtel will be the primary vehicle for the expansion of both Bharti Airtel and MTN in Asia, while MTN will focus on expanding in Africa and the Middle East.
This is the second time that Bharti Airtel has been in alliance talks with MTN. The company, which has Singapore Telecommunications as a key shareholder, said last year that its first round of talks fell through after MTN's insistence that Bharti Airtel should be a subsidiary company of MTN after the deal.