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Bharti Airtel on Wednesday said it will acquire 20 per cent stake in its DTH arm, Bharti Telemedia, owned by an affiliate of the private equity firm Warburg Pincus for ₹3,126 crore. With this move, Bharti Airtel will gain full control of its DTH arm.
The amount will be paid primarily through issuance of about 36.47 million shares of Airtel at a price of ₹600 per share and up to ₹1,037.8 crore in cash, subject to shareholders’ approval, the company said.
The telecom major said this transaction is part of its strategy to align the shareholding of its customer facing products, services and businesses under the same holding group. “A full control and ownership over Bharti Telemedia allows Airtel to offer differentiated and converged solutions to customers so as to promote ‘One Home’ strategy,” it added.
“Airtel will issue its shares to the Warburg Pincus affiliate at a premium of about 0.50 per cent to the floor price determined as per ICDR (Issue of Capital and Disclosure Requirements) regulations. The remaining consideration of around ₹937.8 crore shall be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding ₹100 crore,” the company said in a statement.
Warburg Pincus had agreed to acquire 20 per cent stake in Bharti Telemedia Ltd through an affiliate entity in December 2017.
Harjeet Kohli, Group Director, Bharti Enterprises, added, “This transaction is another step towards simplifying the shareholding of our customer facing businesses providing structural flexibility and ease of implementation. Airtel has always enjoyed a close and strategic partnership with Warburg Pincus, across its business verticals and geographies and we are delighted to have them back as part of Airtel’s exciting journey ahead, including in digital businesses.”
Vishal Mahadevia, MD and Head of Warburg Pincus India, said, “Airtel was one of the earliest and most profitable investments for Warburg Pincus in India. We are delighted to be back as partners in Bharti Airtel through this transaction. We look forward to capitalising on the broad-based growth that the company is witnessing across its entire portfolio of businesses, including the digital build-outs.”
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