BHARTI AIRTEL ZAIN DEAL ANALYSIS PDF

There can be no assurance that a transaction will be consummated. Further announcements will be made in due course. Talk to the people at Bharti and they will tell you off the record that they expect this deal to be smooth sailing. Only the Zain board has to give a go ahead, and we have to pay. Almost every research house has been critical of the deal.

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There can be no assurance that a transaction will be consummated. Further announcements will be made in due course. Talk to the people at Bharti and they will tell you off the record that they expect this deal to be smooth sailing. Only the Zain board has to give a go ahead, and we have to pay. Almost every research house has been critical of the deal. Everyone seems to agree that Zain is a good target for acquisition, but is it worth the price Bharti is paying?

Seven of the 15 countries reported losses. Zain has 42 million subscribers in Africa September while Bharti has These numbers can be used to paint an optimistic picture or a pessimistic one. For instance, low penetration rates could mean either a huge upside opportunity or lack of demand needing many years of expensive market development.

Low ARPUs could imply poor revenue streams or future growth potential. Besides, some operations are showing losses because of mismanagement. Bharti might argue it would change all that. But Zain is in a different league. The balance sheet position appears comfortable for funding the deal. Over time, high minutes of traffic can be generated with lower dilution in ARPU. In India, the numbers range from to depending on the operator. There is an ownership issue with the Zain Nigerian unit. MTN is a major competitor in most of the markets.

Cultural Factors As is the case with every merger, cultural factors will influence how the two companies will integrate their operations. It was known at that time as MTC. In , the company introduced GSM technology in Kuwait, becoming one of the first companies in the region to do so. He worked hard to convert a Kuwaiti telecom operator into a global one. With 24 countries and The target set for was to be among the top 10 telecom companies in the world with more than million customers.

A few days before the Bharti deal was announced, Al Barrak announced his resignation, which was promptly accepted. But the Zain corporate culture is imbued with his go-getting style. Bharti could run into integration problems in Africa. Also, though Mittal says that no government permissions are necessary in fact, both India and Kuwait have welcomed the deal , the telecom regulators of all the countries will have to approve the takeover.

If there is a problem on any of these fronts, it could make the deal look more expensive. If valuations are a cause for concern, raising the money is not. All calculations have been made and there is no issue over which we need to fret. It is an all-cash deal and there is no issue of stock trading. Funding the Deal Although the funding pattern is yet to be worked out, the consensus view is that it will be entirely in debt.

These loans will be replaced with longer-term debt after the March 25 deadline. We are also very happy that the Indian business model, that is the talk of the world, is now going global.

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Bharti-Zain deal – Weak Signals for Airtel

With significant operations in Singapore and Australia through wholly- owned subsidiary SingTel Optus , the Group provides a comprehensive portfolio of services that include voice and data services over fixed, wireless and Internet platforms. Zain bought 67 companies in 13 African countries, all of which it is now selling to Bharti Airtel. Regulation 13 of the ODI Regulations permits a wholly owned subsidiary set up by an Indian company to set up a step down subsidiary. According to Regulation 5 b of the Guarantees Regulations, a company in India promoting or setting up outside India, a joint venture company or a wholly-owned subsidiary, may give a guarantee to or on behalf of the latter in connection with its business; provided that, the terms and conditions stipulated in the ODI Regulations for promoting or setting up such company or subsidiary are complied with. The Competition Act seeks to: prohibit anti-competitive agreements including cartels; prohibit abuse of dominant position; and regulate combinations mergers and amalgamations, and acquisitions.

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Bharti-Zain Deal Analysis: story from Mint

Tygora For instance, low penetration rates could mean either a huge upside opportunity or lack of demand needing many years of expensive market development. Also, though Mittal says that no government permissions are necessary in fact, both India and Kuwait have welcomed the dealthe telecom regulators of all the countries will have to approve the takeover. Bharti could run into integration problems in Africa. But Zain is in a different league. But new Wharton research provides better insight into the benefits of PE buyouts. MTN is a major competitor in most of the markets. He worked hard bharri convert a Kuwaiti telecom operator into a global one.

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Bharti-Zain Deal Analysis

A quick look at the Zain September data nine months of the year only gives us a view of what Bharti is buying. As you might notice, Nigeria is the bull in the room. They can definitely improve some bits tower costs in Africa have been 4x more than India, which can be lowered and internal efficiencies can be improved. The local mafia in Africa will be tougher to handle they take the lucrative deals and back-peddle commissions where in India Mittals political connections would have helped in the early stages. Im not taking a short term call on this stock. If anything each person is supposed to make his own decisions; and Ill see what the market price has to say. If this deal is immensely profitable, Bharti should hit new highs; if its not and Africa is a laggard the prices wont move.

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