Bharti Airtel (“Airtel”), India’s premier Digital communications Company, said that it will acquire a Warburg Pincus affiliate’s 20% equity stake in its DTH arm Bharti Telemedia for a total consideration of ~ INR 31,260 million which will be discharged primarily via issuance of ~36.47 million equity shares of Airtel at a price of INR 600 per share; and up to INR 10,378 million in cash. The issuance of shares proposed through preferential allotment is subject to shareholders’ approval.
The proposed transaction is part of Airtel’s 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.
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.”
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.
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.”
In December 2017, a Warburg Pincus affiliate, agreed to acquire 20% equity stake in Bharti Telemedia Limited, the DTH arm of Airtel.
Citigroup Global Markets India Private Limited (“Citi”) acted as the financial advisor to Airtel and Credit Suisse Securities (India) Private Limited acted as advisors to Warburg Pincus in connection with this transaction.
