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Bharti, Zain deal likely on Tuesday, Gabon objects

LIBREVILLE/MUMBAI (Reuters) - Bharti Airtel’s $9 billion expansion into Africa faced a potential new hurdle on Monday as the government of Gabon raised a regulatory objection to the deal.

A man talks on a mobile phone in front of an advisement of Bharti Airtel in Agartala, Tripura in this January 22, 2010 file photo. REUTERS/Jayanta Dey/Files

Earlier on Monday a source had said that the deal over Bharti’s purchase of the African assets of Kuwait’s Zain would be signed in Amsterdam on Tuesday. The source declined to be identified as they are not authorised to speak to the media.

However the government of Gabon said it “disapproves” of the sale of Zain’s Gabonese assets, and reserves the right to take “all necessary measures”.

Gabon said that Zain Gabon had not complied with telecoms regulations.

The country’s telecoms regulator will review the sale process, an advisor to Gabon’s information minister told Reuters, speaking on condition of anonymity.

“It’s not that we are blocking the sale, it’s suspended while we wait for the results of the (review),” he said. “The regulator will examine the dossier,” he said.

A spokesman for Zain Gabon declined to comment.

Zain holds more than 60 percent of the mobile market in Gabon, the government said. The firm has been operational in the central African country of around 1.5 million people since 2000.

Bharti and Zain said in separate statements last week the due diligence for the assets had been completed and the companies were working towards finalising definitive agreements.

Bharti had said it expected the agreements to be signed soon. Zain’s chairman was quoted on Saturday as saying the deal would be signed in the next few days, though the closing could take weeks or months.

Both Bharti and Zain have said they would seek any required approvals after the signing of the deal.

Bharti, controlled by Indian billionaire Sunil Bharti Mittal, who started his career selling bicycle parts, is desperate to expand in new markets as cut-rate competition at home squeezes profit margins.

Zain’s assets will give the Indian mobile market leader a footprint in 15 African countries.

Bharti Airtel shares closed 0.2 percent higher on Monday, underperforming the broader market that gained 0.4 percent. Zain shares ended 1.5 percent up at 1.4 Kuwaiti dinars.

Reporting by Linel Kwatsi, Tony Munroe and Devidutta Tripathy; additional reporting by Eman Goma in Kuwait; editing by Rupert Winchester and Daniel Magnowski

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