Airtel in $10.7 bn talks for Zain Africa assets

Bharti said in a statement on Monday that it entered into exclusive talks with Zain over the assets,which exclude operations in Morocco and Sudan,until March 25.

Shares in Bharti,which has been hunting for emerging market acquisitions as its home market becomes increasingly competitive,fell 4 per cent in early trading.

“This looks a bit expensive for Bharti considering these are not extremely profitable operations,” said Ambareesh Baliga,vice president at Karvy Stock Broking in Mumbai.

Africa represents about 62 per cent of Zain’s 64.7 million customers,but only 15 per cent of group net profit.

“No doubt,those are future growth areas. But the growth will come only in 5-8 years time and in the short-term there is a risk of straining Bharti’s balance sheet,” said Baliga.

Bharti,which reported its slowest profit growth in more than three years for the December quarter,last year failed for a second time to clinch a $24 billion tie-up with South Africa’s MTN,with political rather than commercial factors seen as the deal-killer.

In October,Akhil Gupta,deputy group CEO at the Indian mobile operator’s parent,said Bharti would look at buying a stake in Zain if the opportunity arose.