Merger talks between India’s largest carrier, Bharti Airtel, and pan-MEA operator MTN have been extended by an extra month, suggesting an agreement may be in the pipeline.

The two companies restarted exclusive talks in May 2009, around a year after calling earlier merger talks off. “As discussions between the parties regarding the potential transaction are continuing, both parties have agreed to extend the exclusivity period up to August 31, 2009,” the companies said on Monday morning.

Both Bharti and MTN each broke the 100 million subscriber barrier earlier this year. Bharti is the third largest single-market operator in the world, after China Mobile and China Unicom, while South Africa-headquartered MTN is one of the MEA region’s strongest players, with operations in 22 countries. Combined, the two carriers would rank third in the world in subscriber terms, behind China Mobile and Vodafone.

The proposed deal would see Bharti acquire 49 per cent of MTN and MTN acquire 36 per cent of Bharti, of which 25 per cent would be held by MTN with the remainder held directly by MTN shareholders.

MTN would pay some $2.9bn in cash and newly issued shares for its stake in Bharti, while the Indian firm would acquire approximately 36 per cent of the currently issued share capital of MTN for ZAR 86.00 in cash plus 0.5 newly issued Bharti shares (per MTN share). This acquisition would push Bharti’s holding in MTN to 49 per cent.

The two companies were eager to point out however that no decisions or agreements have yet been made and no transactions may be forthcoming. The structure and terms of the potential transaction may also be adjusted to reflect further discussions, the companies said.