Highlights of the deal:   

• MTN is 50% bigger than Bharti though Bharti grows at 1,000 bps faster than MTN    

• Bharti commands a higher multiple than MTN, though growth opportunities are extremely similar in both target markets, i.e. India or MEA    

• Net debt / EBITDA is still pretty good for MTN Airtel given the > 40% growth rates, which should sustain at 35-40% levels at least till FY11/12    

• Although gearing appears to increase post-transaction EBITDA is strong enough to support debt servicing    

• Capex requirements possibly range from $5-6 billion going forward, coupled with strong network footprint established by both players in the existing markets.    

• MTN is essentially part financing the buyout of its own shareholders by paying $2.9 billion to Bharti for the latter to increase its stake to 49% in MTN    

• Bharti is thinly leveraged currently, and would need to resort to short term acquisition financing to fund the deal  

• Net net, subject to regulatory compliances given extensive geographical spread of MTN, the merger appears to be have sound commercial value proposition    

• Minority interests of JV partners needs to be assessed    

• EV / sub is around the US$ 350 mark    

• Any further upsides on synergy (capex, management, towers, etc) will only add to the value proposition    


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