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Talks called off Talks between Anil Ambani owned Reliance Communications (RCOM) and South African Telecoms giant-MTN were called off on Friday night without reaching any agreement. Talks were aimed at merger of both of the telecom companies that could have created one of the 10 top mobile phone service provider’s powerhouses. Both of the sides in their statements have said that talks were called off because of some legal and regulatory issues.

Agreement Negotiations between both of the telecom companies had started on May 26 and were being held secretly but somehow the news spread out that Mr. Anil Ambani is going to sell his stake in Rcom to MTN following which MTN would have become the majority shareholder in the Rcom. It was also being said that Ambani would also become the chairman of the merged group. After the merger Rcom would have become a telecom company operating in about two dozen countries with its reach to around 120 million subscribers.

Battle It is being said that the result is the outcome of the wrangle between the Ambani siblings. As the talks over the deal were in process Mr. Mukesh Ambani threatened to use his right of first refusal over the shares of Rcom.When Reliance was demerged on January 2007 an agreement was signed between both of the Ambani siblings. According to which Mukesh Ambani was given the right of first refusal over the shares of Rcom. Mukesh had warned that MTN will have to face the court case that he had decided to file against Rcom for its breaching the January 12 agreement. Battle between both of the brothers worsened because of the claims and counter claims.

Issues MTN had extended the date of the talks to give more time to the Ambani brothers to resolve the dispute but nothing enthusiastic happened. According to PTI, Rcom in a statement said,” The two sides were unable to conclude the transaction due to certain regulatory issues”. Mukesh had on Thursday had started arbitrary proceedings. To avoid the court MTN decided not to go ahead with the tie-up talks. It was once again the eruption of the battle between the Ambanies that abruptly ended the negotiations between RCOM and MTN.