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Bharti Infratel to explore buying stake in Indus Towers

30 October, 2017

Telecom tower operator Bharti Infratel Ltd said on Monday it has decided to explore acquiring some or all the stake it doesn’t already own in Indus Towers Ltd.

The company could buy the stake in Indus in one or more tranches, it said in a stock-exchange filing.

Indus Towers is currently a three-way joint venture among Bharti Infratel, Vodafone India Ltd and Idea Cellular Ltd. Bharti Infratel and Vodafone each have a 42% stake while Idea owns 11.5%.

Bharti Infratel’s plan to acquire Indus Towers comes after Idea Cellular and Vodafone India decided, in March, to merge their wireless businesses and said they would sell their tower assets.

Bharti Infratel, a unit of top Indian mobile-phone operator Bharti Airtel Ltd, has a portfolio of about 90,000 telecom towers. This includes almost 39,000 of its own towers and the balance from its stake in Indus Towers.

If Bharti Infratel acquires Indus Towers, it would replace American Tower Corp as the biggest telecom tower company with more than 1.61 lakh towers. ATC operates 1.48 lakh towers globally, including about 58,000 in India, according to its website.

Earlier this month, The Economic Times reported that a consortium of US private equity firm Kohlberg Kravis & Roberts & Co (KKR), Canada Pension Plan Investment Board (CPPIB), Abu Dhabi Investment Authority and Singapore sovereign fund GIC Pte. Ltd were in talks to acquire Indus Towers and Bharti Infratel via a two-stage transaction.

The report said that, first, Bharti Infratel will acquire Indus and then the KKR-led consortium will increase its stake in Bharti Infratel to become its single-largest shareholder.

KKR and CPPIB had picked up a 10.3% stake in Bharti Infratel for Rs 6,193 crore ($951.6 million) in March. After this transaction, Bharti Airtel owns 61.7% of the tower unit.

Indus Towers is India’s largest tower company with a 31% market share. State-run BSNL has 17% share, ATC 15%, Reliance Infratel and Bharti Infratel 10% each, and Idea and Vodafone 2% share each.

For the quarter ended September, Bharti Infratel’s consolidated revenue grew 11% from a year earlier to Rs 3,648 crore.

India’s telecom tower sector has consolidated in recent years. NYSE-listed ATC had bought a 51% stake in telecom tower firm Viom Networks Ltd for Rs 7,635 crore in 2015.

In December 2016, Reliance Communications agreed to sell a majority stake in its tower business to Canada’s Brookfield for $1.6 billion. However, the deal is now being renegotiated.

Both Brookfield and ATC were eyeing other tower businesses and had considered buying a majority stake in Bharti Infratel, media reports said previously. Several PE firms are also looking at acquiring Tower Vision India Pvt Ltd.

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Bharti Infratel to explore buying stake in Indus Towers

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