SA may not approve Bharti-MTN deal this year

South Africa’s communications regulator said it might not grant approval for the proposed tie-up between mobile phone group MTN and Bharti Airtel this year.

Paris Mashile, chairman of the Independent Communications Authority of South Africa (Icasa), also told Reuters on Tuesday the regulator would not talk to MTN about any deal until “all the documentation and facts and everything” were ready.

Asked if the regulator would try to block the deal, as it tried to do with Vodacom’s transaction with Vodafone, Mashile said: “No. That is not really how we approach it. One size does not fit all”.

The Bharti-MTN transaction is subject to an end-September deadline set by the companies. But the two have extended talks twice before, and a person with direct knowledge of the matter said on Monday it was possible the talks could be further extended by a few days.

South Africa is pressing India for an agreement on dual listing of companies before the end-September deadline. The Indian government said on Tuesday it was open to a dual listing by MTN on exchanges in India and South Africa, PTI reported.

“There is a provision for the dual listing of companies,” finance minister Pranab Mukherjee told reporters in Chennai, the news agency reported. “The South African minister met me at G-20 finance ministers meeting and there I suggested to him that this arrangement is to be looked into in the Indian context,” Mukherjee was quoted as saying.

Bharti and MTN were involved in similar talks last year but failed to reach an agreement, leading to failed negotiations. Siphiwe Nyanda, South Africa’s communications minister, said on Tuesday he was not interested in blocking the deal. “What I am saying is all we are interested in is what kind of management agreement outcome results out of this and all we want is that this remains a South African company. That is all,” Nyanda said.

Ranjana Smetacek, a spokeswoman for Bharti Airtel, declined to comment on whether a delay in regulatory approval would be a roadblock for the deal. One analyst said regulatory problems were always present in cross-border transactions.

“But in this case, it looks slightly strange that South Africa is now saying they are cautious over the deal after so many days of negotiations. But anyway, Bharti, MTN have to answer all questions raised by regulators and the government there,” said R.K. Gupta, managing director at Taurus Asset Management in New Delhi. “So the deal is going to get stretched and a further extension in talks can not be ruled out,” Gupta added.