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AZB scores Bharti-MTN, India's largest deal ever (Update 1)

AZB & Partners has bagged the biggest ever Indian cross-border merger mandate, advising Bharti Airtel on its revived $23bn bid to take over South African telecoms major MTN.

London international Freshfields Bruckhaus Deringer will be advising long-standing client MTN but the company's Indian counsel has not yet been chosen.

AZB Delhi partners Ajay Bahl (pictured) and Gautam Saha are understood to be leading the legal team for Bharti, having won the instruction off the back of previous work done by the firm for the company.

In the past, AZB has acted for Bharti on the Indus Towers telecoms infrastructure joint venture between Airtel, Vodafone and Idea, as well as on Bharti's telecoms investments with Singaporean telco Temsasek.

Bharti's South African counsel is local firm law firm Bowman Gilfillan, where the team is understood to be led by its corporate head Ezra Davids.

MTN's South African counsel is Webber Wentzel, which has previously worked with Freshfields for MTN. Freshfields corporate partners Bruce Embley in Dubai, India head Pratap Amin and corporate partner Simon Weller in London are understood to be leading the team on the transaction.

AZB and Freshfields declined to comment.

The estimated $23bn merger between MTN and Bharti would be India's largest ever cross-border transaction, at twice the size of Tata Steel's $13bn acquisition of British steelmaker Corus in 2006, according to information from data provider Thomson Reuters.

The acquisition takes place against a backdrop where India's cross border M&A activity has decreased by 95 per cent as against the same period last year, down from $7.4bn to $370.8m.

Bharti MTN would be the world's second largest M&A deal this year after Schering-Plough's $45.9bn acquisition by Merck in March. Those companies were advised by US firms Wachtell Lipton Rosen & Katz and Fried Frank Harris Shriver & Jacobson respectively.

However, in the size stakes, Bharti and MTN's tie-up could just pip Spain's Endesa $14.2bn acquisition by Enel at the beginning of the year, on which Spanish firms Uría Menéndez and Cuatrecasas advised.

The MTN transaction is likely to be structured as a complex scheme of arrangement involving cash and equity. If completed, this could see the Indian company take a 49 per cent stake in MTN, while giving the South African company and its shareholders a 36 per cent Bharti stake in return.

The combined Afro-Indian telecoms operator would have combined revenues of over $20bn with a customer base of over 200m.

Bharti's financial advisers are Standard Chartered and its affiliate First Africa. MTN is receiving financial advice from Bank of America, Merrill Lynch and Deutsche Bank.

The revival of the merger talks follows MTN's aborted talks last year with Bharti as well as its Indian telecoms rival Reliance.

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