The proposed takeover of mobile operator Reliance Communications by South Africa's MTN is in danger of moving to the courts as India's billionaire Ambani brothers fight over the terms. Mukesh Ambani, through his group Reliance Industries, warned that he would block the planned merger by claiming a right of first refusal over Reliance Communications, the company owned by his brother Anil Ambani.
Mukesh Ambani has threatened to sue MTN and Reliance Communications for damages if the deal moves ahead. Anil Ambani's group has responded with legal threats of its own.
"If Reliance Industries chooses to take any legal action, the same will be vigorously defended by Reliance Communications and Reliance Communications will claim costs and damages from Reliance Industries," the company said.
In May, Reliance and MTN announced an agreement on a reverse takeover that would see Reliance make a bid for MTN, but MTN would end up with control of Reliance. MTN has a market value of about $40 billion. Reliance is valued at just below $30 billion.
For more:
- read the Financial Times [1]
Related story:
MTN and Reliance could form mobile-phone powerhouse. MTN story [2]
Links:
[1] http://www.ft.com/cms/s/0/68cd094e-3aef-11dd-b1a1-0000779fd2ac.html
[2] http://www.fiercewireless.com/story/south-africas-mtn-could-control-indias-reliance-creating-mobile-phone-powerhouse/2008-05-28