Africa's biggest wireless carrier, MTN Group Ltd. and India's Reliance Communications Ltd. decided to postpone their negotiations regarding their joint venture. The information came from three sources familiar with the situation.
MTN was said to be uncertain concerning the industrial rationality behind a deal during a time when India was amending its rules on mergers and acquisitions. One of the sources said that the talks led to MTN taking around 24% share in Reliance Communication. The investment's market value was US$1.2 billion.
MTN was led by its Chief Executive Officer Sifiso Dabengwa. Dabengwa wanted to win a deal in India because the progress of wireless use in Africa slowed.
"An acquisition of this nature could potentially limit MTN's growth in other markets," Kate Turner-Smith said through an interview on the phone. Turner-Smith was BPI Capital Africa Ltd's Cape Town-based analyst. "Everyone is relatively pleased with the increased dividend yield, and anything that might endanger that would be frowned upon."
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