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Please use this identifier to cite or link to this item: http://repository.iitr.ac.in/handle/123456789/9615
Title: Mysterious broken cross-country M and A deal: Bharti Airtel-MTN
Authors: Srinivasa Reddy K.
Nangia V.K.
Agrawal, Rajat
Published in: Journal of the International Academy for Case Studies
Abstract: This management case is designed to explicit the implied connection between business environment, competitive & industry forces, business strategy and negotiations. In a nutshell, it imparts the domain knowledge of inorganic strategies, like joint ventures, mergers and acquisitions (M&A), in order to keep their global presence and brand loyalty in the emerging markets. Lastly, Bharti Airtel - MTN cross-country M&A case helps students to get involve in international investment decisions in the perspective of international business environment. They also come to know various sensitive issues while finalizing the deal between two unknown parties, further how deal got complicated consequently caused the deal failure in the two negotiations during two successive years. • Domain knowledge: Business Policy and Strategy • Elective of the case: Inorganic Opportunities • Focus part: Cross-border Mergers & Acquisitions • For whom: BBA; MBA (Full-time and Executive); MDP's • Estimated time for discussion: 120 minutes • Method of lecture: Brainstorming; Group/Team participation. Case Synopsis: To meet the international business commitments and prepare students to craft combatstrategies for achieving translational entity's objectives, the present case aims to illustrate theeffect of global business environmental factors while negotiating cross-country M&A deals. Ithas been assisted by India-South Africa, a cross-border telecom deal. Further, it discusses keyissues which have led to delay' consequently broken the inorganic negotiations that lead tostrategic competitive and geographical advantage. In particular, this case builds a platform formanagement scholars to improve communication tactics whilst engaging in internationalbusiness relationships. Conversely, it would be addressing sensitive issues in chronologicalorder that how long-term negotiations would lead to collapse the cross-border relations.Exclusively, broken M&A deals help to find key failure negotiations which could be assist forchoosing inorganic opportunities in future.We now know that the "World is flat" and "Knowledge is borderless". As such,economic changes are bound to be rapid. Complexity and disparity are possible major factorsworrying world leaders and global institutions. Indian economy, today a competitive,deregulated and open economic system, is one of the major destinations for foreign investors inthe world. India encourages foreign affiliates to establish operations in the country throughdirect investment, joint ventures, M&A and outsourcing contracts.The objective of present case is to describe and track critical factors behind the failure ofmega cross-border deal between Bharti Airtel (India) and MTN Group (South Africa) in theglobal telecom industry. The case covers failure of advisors role-play and how negotiations wereextended and leads to calling-off deal in the second innings - 2009 after it was first attempt in2008. It also covers the role of government and regulatory bodies of the respective countries.The alliance would have improved Bharti's competitive position as a leading telecom companyin the emerging markets. Bharti and MTN needed an excessive inward focus for a feasiblemerger, when competitors were trying to snatch their business.The history of mega mergers and acquisitions attest that most combinations end up bydestroying shareholders value. Mergers fail largely because of expected synergies seize longertime to deliver, price is too high, or there is no complete in-charge. Bharti and MTN could haveUS$20 billion in revenues and over 200 million customers, making them the third biggesttelecom company in the world after China Mobile and Vodafone. They would have spanned twocontinentals & able to cut costs by integrating technology and reducing overheads. After twofoldnegotiation talks in the two consecutive years, the deal has been broken and windup with someprecautionary signals while choosing cross-border M & A by Indian entrepreneurs and othercommunity world.
Citation: Journal of the International Academy for Case Studies (2012), 18(7): 61-76
URI: http://repository.iitr.ac.in/handle/123456789/9615
Issue Date: 2012
ISSN: 10784950
Author Scopus IDs: 55601633800
57197373384
57209499374
Author Affiliations: Srinivasa Reddy, K., Indian Institute of Technology Roorkee, India
Nangia, V.K., Indian Institute of Technology Roorkee, India
Agrawal, R., Indian Institute of Technology Roorkee, India
Corresponding Author: Srinivasa Reddy, K.; Indian Institute of Technology RoorkeeIndia
Appears in Collections:Journal Publications [MS]

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