Adag, At&t Eye Equity Deal In Reliance Communications: Sources

[Arun 795]

Published on Tue, Jun 23, 2009 at 20:09 , Updated at Tue, Jun 23, 2009 at 21:28

Source : CNBC-TV18

Anil Dhirubhai Ambani Group and AT&T may explore talks for a tie-up, sources told CNBC-TV18's Siddharth Zarabi. Both companies may look at an equity deal in Reliance Communications.

When contacted, AT&T said it does not comment on rumour or speculation. ADAG too said it does not comment on speculation.

Reliance Communications is among top three telecommunication companies in India and operates in both the GSM and CDMA space. In 2008, the company had explored merger talks with South Africa's MTN.

AT&T is keen on foraying into India. It had earlier stated that it could acquire a license or a company.

Here is a verbatim transcript of Siddharth Zarabi’s comments on CNBC-TV18:

This could be a big move by Anil Ambani and AT&T. The latter has been looking at India for some time now. It exited India in 2004 at least from the telecom services business. Reliance Communications last year was talking to MTN.

What we pick up from our sources is that some sort of initial and preliminary assessment of the possibilities of a deal is happening. For the record, both companies have said that they do not comment on market speculation or rumours. But our sources say this is something that is being considered at this point. In fact, there were reports earlier this week about Reliance Communications offering a small stake to China Mobile, which the latter has subsequently officially denied.

At this point in time, there is no confirmation with regards to what kind of structure this proposed deal could have in the future. But clearly what we are picking up at this point from very reliable sources is that both companies are possibly going to tango in the near future.