India's Bharti still in talks, media crowns Wal-Mart
By agencies | Monday, 20 November 2006, 06:00 Hrs
Mumbai: India's Bharti Enterprises Ltd. said on Monday it is still negotiating a partnership with major international retailers, amid media speculation that U.S. retailer Wal-Mart Stores may have secured the deal.
Weekend media reports said a deal had been finalised with Wal-Mart, but a spokesman for the Bharti group, which controls India's biggest mobile services provider, Bharti Airtel Ltd. (BRTI.BO: Quote, Profile, Research), told Reuters that no deal had been finalised.
Bharti Chairman Sunil Mittal told Reuters last month that a deal was likely by the end of November. He said then that Bharti was in talks with Wal-Mart, the UK's Tesco Plc (TSCO.L: Quote, Profile, Research) and France's Carrefour (CARR.PA: Quote, Profile, Research).
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"Despite media reports that we have reached a deal, we continue to be in talks with all the global majors," the Bharti spokesman said on Monday, declining to specify when a deal may be done. "Any deal takes time."
Indian media have reported that the decision appears to be between Wal-Mart and Tesco. The Financial Express said at the weekend that Bharti and Wal-Mart had finalised a master franchise agreement that would include hypermarkets, supermarkets and grocery stores.
The two would initially invest $100 million, going up to $1.46 billion, the paper said, quoting industry sources.
Foreign retailers are keen to enter India's rapidly growing market, but multiple-brand retailers are only allowed to operate through franchises and licencees, or a cash-and-carry wholesale model, like Metro AG (MEOG.DE: Quote, Profile, Research) and Shoprite (SHPJ.J: Quote, Profile, Research) have chosen.
Single-brand retailers are allowed to own a majority stake in a joint venture with a local partner, and the expectation is that India would ease rules on foreign investment.
"Bharti can't lose with either (Wal-Mart or Tesco): both have the size and the branding and a proven track-record in non-home markets," said a retail consultant who declined to be named.
"Ultimately, it would come down to who can deliver the better value and a cultural fit between the two companies," he said.
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