RCOM-MTN deal

The RCOM and MTN deal has been officially called off after the two sides were not able conclude the transaction due to some regulatory issues.

The deal, which was clouded by the bitter dispute between the Ambani siblings, was called off a day after RIL nominated an arbitrator to resolve the dispute with RCOM.

From Times of India

The deal, which had seemed a real possibility at one stage, went off the rails after Mukesh Ambani’s Reliance Industries Ltd claimed that it had first right of refusal on RCOM shares, as part of an agreement at the time of partition of the Reliance empire. The proposed deal depended on RCOM and MTN agreeing on a share swap, which could not proceed once RIL stepped in.

The final nail in the deal’s coffin appears to have been RIL’s decision to move for arbitration and appoint retired Supreme Court judge B P Jeevan Reddy as arbitrator on Thursday. Though the exclusivity period was due to lapse only on July 21, the two parties decided to call it off on July 18 itself, citing “certain legal and regulatory issues”.

The RCOM-MTN-RIL triangle would have been riveting enough even as a purely business story, but it gained further drama with the addition of a political angle. Samajwadi Party leader Amar Singh, a close friend of Anil Ambani, is reported to have suggested that the prime minister should play peacemaker between the Ambani brothers and that the government should throw its weight behind the deal, as it had in the case of Lakshmi Mittal’s takeover of Arcelor. The SP has gained immense clout of late, since it has become essential to the survival of the UPA government.

Conclusion : There could be a possibility that Mukesh Ambani might have sensed that the deal could have been bad for his younger brother Anil as the controlling stake of Anil would have been diluted.

What are your opinions on the RCOM-MTN deal ?

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