Bharti Airtel today announced that it will acquire a Warburg Pincus affiliate’s 20% stake in its DTH arm Bharti Telemedia for a total consideration of Rs 31, 260 million which will be discharged primarily via issuance of 36.47 million equity stakes of Airtel a ta price of Rs 600 per share and upto Rs 10,378 million in cash. The issuance of shares proposed through preferential allotment is subject to shareholder’s approval.
The proposed transaction is part of Airtel’s strategy to align the shareholding of its customer facing products, services, and business under the same holding group with a full control and ownership over Bharti Telemedia allowing Airtel to offer differentiated and converged solutions to customers so as to promote ‘One Home’ strategy. Warburg Pincus had in 2017 acquired a 20% stake in Bharti Telemedia Limited. Citi Group Global Markets acted as the financial advisor for Airtel with Credit Suisse Securities as the advisor for Warburg Pincus.
Harjeet Kohli, Group Director, Bharti Enterprises said, “DTH is an integral part of our Homes strategy and 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, Managing Director 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.”
“Airtel will issue its shares to the Warburg Pincus affiliate at a premium of ~0.50% to the floor price determined as per ICDR regulations. The remaining consideration of ~ INR 9,378 million shall be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding INR 1,000 million,” said Bharti Airtel in a release.