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RAJA RAJESWARI BOMMU (Employee) (33 Points)

23 July 2010

any one can u provide information relating to any recent mergers. urgent please

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Raghav Toshniwal (student) (450 Points)
Replied 23 July 2010

Recent mergers deals are between Bharti Airtel & Zain

Following are the datas relating to this deal,-------

Bharti’s ambitions of an African safari have been fulfilled, following the acquisition of Zain Telecom’s 15-country Africa operations for a total enterprise value of $10.7 billion.

The acquisition is the second largest by an Indian company since Tata Steel’s $13.6-billion acquisition of Anglo-Dutch steel maker Corus. It will catapult Bharti to the rank of the sixth-largest telecom service provider in the world by number of subscribers. And, in an ironic twist of fate, one of Bharti’s major competitors in its new markets will be MTN.

According to the financial arrangement announced by Bharti Airtel on March 21, Bharti has to make a total payout of $9 billion after discounting $1.7 billion of debt. Of this, $8.3 billion will be paid upfront while the remaining $700 million is payable after a year.

Bharti will be up against some well-entrenched competitors in Africa, including some home-grown companies and others who are parts of global telcos. Additionally, Bharti will have to complete all regulatory clearances in 15 countries.

According to analysis, the combined entity will have 163.5 million subscribers with Zain Africa contributing 41.9 million and Airtel 121.6 million. The combined EBITDA (earnings before interest, tax, depreciation and amortization) margins are 38.3% with Zain Africa’s EBITDA at 32% and Bharti’s at 41%. Combined net margins are 15.4% with Zain Africa at 4.1% and Airtel at 23.8%.

The enterprise value per subscriber of the combined entity works out to $217.3. Zain Africa’s ARPUs are an average of $8.2 (ranging from as high as $25 in Gabon to as low as $3 in Ghana while Bharti’s ARPU is $4.9.