Leading Middle Eastern operator Etisalat is in talks to acquire a 25% stake in Reliance Communications, according to the Times of India.
The UAE based operator confirmed that it is interested in acquiring an Indian operator aside from its joint venture…
Leading Middle Eastern operator Etisalat is in talks to acquire a 25% stake in Reliance Communications, according to the Times of India.
The UAE based operator confirmed that it is interested in acquiring an Indian operator aside from its joint venture Etisalat DB Telecom although it has not confirmed that it has approached Reliance.
India’s second largest mobile operator Reliance would be likely to net around US$4bn from a sale of a 25% stake and the company claims to have received interest from a number of international players.
Earlier this week there had been reports that Reliance was considering reigniting merger talks with MTN of South Africa but again this was unconfirmed.
A deal between Etisalat and Reliance would seem to make sense for both parties with the ambitious Arab firm eager to increase its influence on the world’s fastest growing mobile market and Reliance keen to recoup some funds to help pay for its 3G investments.
Reliance paid out around US$1.8bn for 3G spectrum licences in May while Etisalat pulled out of the Indian auction as the costs began to soar.
According to the Times of India Etisalat would offer to buy a 25% stake in Reliance and then make an open offer to acquire a further 20% from the open market.
Reliance chairman Anil Ambani currently owns 67.58% of the company but he is reportedly prepared to dilute that holding.
For its part Etisalat would be required to sell its stake in Etisalat DB as Indian law states that no company can own more than 10% of any two operators.
Etisalat acquired a 35% stake in its existing Indian subsidiary for US$900m in 2008.