Anil Ambani has won Lebanon-based M1 Chief Executive Officer Azmi Mikati's approval for a possible merger of Reliance Communications and South Africa's MTN Group following a meeting between the two.
The agreement between M1, the second largest shareholder in MTN, and the RCom chairman was arrived at a meeting held in London on Wednesday.
"The meeting of Ambani and Mikati has ended on a positive note and the MTN chief offered his support to the proposed merger," said sources close to the development.
M1 holds 10.2 per cent stake in MTN and Mikati represents the company in the director board. If the proposed reverse merger takes place, the Mikati family will become an indirect stakeholder in RCom with a 6 per cent in return for the stake in MTN. On the other hand, Anil Ambani will become the single largest shareholder in the merged entity with around 35 per cent stake through an open offer to MTN shareholders, said sources.
This was Ambani's first meeting with Mikati after the two companies announced that they were in talks to create a telecom major with 115 million subscribers in 25 countries. Last week, Ambani had met MTN CEO Phuthuma Nhelko and the key management of the MTN Group.
The Lebanon-headquartered M1 group is owned by the Mikati family was the majority shareholder in Investcom, which was merged with MTN in 2006 for around $5.5 billion. Leading politician and former prime minister of Lebanon, Najeeb Mikati, is the chairman of the M1 Group, which has business interests across the world.
Lombard Odier Darier Hentsch & Cie, a company promoted by Lebanon's former prime minister, holds a 9.82 per cent stake in MTN, while Newshelf 664, an investment firm of MTN employees, holds 13.06 per cent and directors and subsidiaries hold 0.03 per cent in the company. The public and financial institutions hold the remaining stake.