According to reports in UK newspapers which include Telegraph and The Times, Vodafone is examining a pound 19-20 billion (around $38-40 billion) bid for MTN. It is believed that chief executive officer Arun Sarin has instructed his in-house acquisition team, led by former UBS banker Warren Finegold, to study the possibility.
Vodafone, however, already has a presence in South Africa through a 50 per cent equity stake in Vodacom, the largest mobile operator in South Africa with a 58 per cent market share.
However, the company's attempts to hike its stake in Vodacom by acquiring stakes from partner South Africa 's Telkom had been stifled last year. The South African government, which owns Telkom, was unable to agree to a price.
At the moment Vodacom operates in four other markets including Tanzania , Congo , Lesotho and Mozambique . However, the acquisition of MTN would give the company a much larger emerging market footprint into over 21 countries across Africa and west Asia.
When contacted by Business Standard on May 6, a Vodafone spokesperson said, "Vodafone remains committed to its partnership in South Africa with Telkom, in Vodacom, in which Vodafone holds 50 per cent".
Sarin, who once partnered with Bharti with a 10 per cent equity stake in Bharti Airtel, is now a key rival to Mittal in India after it picked up majority equity stake in Vodafone Essar in India (formerly Hutchison Essar).
Last week Bharti Airtel announced that it was in "exploratory discussions" with MTN. The Mittals have got the support of the Lebanon-based Mikati family, which owns around 10 per cent equity stake in MTN. It is also believed to have talks with the management of the company who are key shareholders.
Earlier this year, Sarin hinted in a press briefing that key strategies in 2008 would be acquisitions across Asia and African markets.
However Vodafone - if it decides to join in the race - might find it tough to acquire MTN especially as it already has a presence in South Africa, and control in both the companies will create a monopoly. This would also evoke regulatory issues in the country.
However Vodafone could alternatively look at selling off its stake in Vodacom and buy into MTN, which has a larger global footprint. Or better, just buy MTN international operations.
