The report said that two companies have reached advanced stages in merger discussions and are negotiating on a deal that gives a substantial shareholding to Sistema in Tata Teleservices by transferring NTT DoCoMo's stake as well as part of the Tata Group's holding.
While Sistema has appointed Rothschild as banker for the transaction, Tata Teleservices has appointed Standard Chartered for the deal.
Experts said that current M&A policy is not favourable for the two companies as it may require MTS to either surrender or pay the market price to retain the airwaves held by Tata Tele. Both the companies didn't confirm the development, said media.
Analysts believe that Tata Group plans to reduce exposure to the telecom sector to a minority stake and that's why this deal with MTS. Moreover, it has also reportedly reduced funding for the telecom venture due to which Tata Teleservices has decided to sell stake to MTS to retire its debt burden.