The deal is estimated to be worth $3 billion.
Emirates Telecommunications (Etisalat) is close to buying 26 per cent in telecom firm Reliance Communications (RCom), the Financial Times said on Monday, sending RCom shares up nearly four per cent.
Citing people familiar with the negotiations, the newspaper said the deal was estimated to be worth $3 billion (about Rs 14,133 crore).
The two groups are also considering merging RCom, the country’s No 2 mobile operator, with Swan Telecom, the Indian company in which Etisalat holds a 45 per cent stake, it said.
RCom and Etisalat could not be immediately reached for comment.
Shares in RCom, valued by the market at $8.3 billion, jumped as much as 3.9 per cent on the report in a subdued Mumbai market.
An alliance between the two groups could be completed as soon as mid-August, the Financial Times reported, citing a person close to the matter. Another person told the paper it could take up to the end of the year. RCom and Etisalat declined to comment on any specific negotiations, the paper said.
A successful outcome hinges on how fast Etisalat can free itself of the stake in Swan Telecom, a joint venture it acquired in 2008, as Indian regulations do not allow one company to own more than 10 per cent in two telecom groups, the paper said.
Several potential suitors cited in media reports based on unnamed sources have denied being in talks with RCom, controlled by billionaire Anil Ambani.
So far, only Abu Dhabi-based Etisalat has acknowledged that it is considering a deal with RCom, the only major local cellular carrier without a foreign strategic investor in the world’s fastest-growing mobile market.
Anil Ambani has been in dealmaking mode since ending a pact in May with his long-estranged brother, Mukesh Ambani that forbade the two from competing on the other’s turf, freeing Anil to bring new investors into his debt-laden company.
That pact had enabled Mukesh Ambani, the world’s fourth-richest man, to assert a right of first refusal two years ago that blocked a deal between RCom and South Africa’s MTN.
Last month, RCom agreed to merge its telecom communication towers business with that of GTL Infrastructure, in a deal that a source said would cut its debt by $3.9 billion.
By 0443 GMT, shares in RCom were up 2.3 per cent at Rs 191.40, while the BSE Sensex was flat.
