Author: Aaron Chaze

Roundup

By Aaron Chaze

Regulars_EM-Roundup1

Calling plan: Bharti Airtel is expanding into new markets

As the Indian wireless markets become ever more competitive, local companies are looking overseas for potential growth. South Asia’s largest wireless carrier, Bharti Airtel, for example, is seeking to acquire the African assets (except Morocco and Sudan) of Kuwait-based Mobile Telecommunications for $10.7 billion. Bharti is expected to borrow $7 billion via a seven-year US dollar loan to finance the purchase. Africa is considered to be the last remaining frontier market for mobile telecommunications, and Bharti hopes to replicate its success in India in a new under-served market.

Bharti Airtel’s bid for mobile telecom assets in Africa is just one of several recent or ongoing ambitious attempts by Indian companies to expand outside of India. According to global M&A; deal-tracking firm Dealogic, in addition to Bharti’s offer, other Indian companies have already done close to $2 billion worth of cross-border deals since the beginning of the year. In early March, energy giant Reliance Industries failed in its $14.5 billion to buy LyondellBasell Industries, which if successful would have been the largest ever overseas acquisition by an Indian company. Shareholders of both Bharti and Reliance had reacted negatively to the proposed acquisitions, believing the acquiring companies were bidding too much for their target assets.

Doing their bit to further Indian investors’ appetites for foreign exposure, the National Stock Exchange (NSE) and the Chicago Mercantile Exchange (CME) jointly announced in early March that futures contracts on the Dow Jones Industrial Average (DJIA) and the S&P; 500 will be offered in India through the NSE. The CME, in turn, will trade futures contracts on the Nifty, the 50-share index representing India’s largest companies. Both cross-border product offerings will need regulatory approvals in India and the US. The NSE has said that it is pursuing a similar deal with the Singapore Exchange.