As a prelude to a full merger that could bring about the creation of the world’s third-largest wireless carrier, Bharti Airtel of India and the MTN Group of South Africa have agreed tentatively to a stock and cash swap, valued at US $23 billion, that would give each carrier significant equity stakes in the other company. Bharti, India’s largest mobile phone service firm, boasts 100 million subscribers and would be entering its first significant foreign venture with MTN. Although MTN serves the same number of customers as Bharti, MTN serves a larger geographic footprint that spans Africa and the Middle East. Should Bharti and MTN eventually merge, the combined entity would command a market value in excess of US $60 billion and would be exceeded in terms of subscribers only by China Mobile and by Vodafone of the U.K. Under the initial share swap, which requires the approval of 75% of MTN’s shareholders, Bharti would gain a 49% stake in MTN by exchanging $10.35 in cash plus half a newly-issued share of Bharti stock for each MTN share it acquires. In turn, MTN would acquire 36% of Bharti by paying $2.9 billion in cash and by issuing enough new shares to reach a combined total worth of a quarter of Bharti’s overall value. Acknowledging that discussions are ongoing, the companies confirmed that they have agreed to implement an exclusivity period to end on July 31. The chairman of Bharti Airtel’s parent company proclaimed that the pact would “serve as a shining example” of cooperation between South Africa and South Asia.