A second call

25 April 2018 By Una Galani Follow @ugalani

A union of Bharti Infratel and Indus Towers creates a $15 bln company with more masts than heavyweight rival American Tower. This paves the way for indebted telecoms backers, including Vodafone, to take out a special dividend or sell part of the merged group to a buyout firm.

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Bharti Infratel and Indus Towers announced on April 25 a plan to merge, creating the world's largest telecom tower company by number of masts outside of China.

Mumbai-listed Bharti Infratel will offer 1,565 shares for each Indus Tower share, giving the enlarged entity a combined equity value of 965 billion rupees ($14.5 billion), the companies said in a joint statement.

Indus Towers is a private company, owned 42 percent by Bharti Infratel, 42 percent by Vodafone, 11.15 percent by Idea Cellular, and 4.85 percent by Providence Equity Partners. Bharti Infratel is 53.5 percent owned by Bharti Airtel, India's leading telecom operator, while private equity firm KKR and Canada Pension Plan Investment Board also own stakes.

Idea will sell its entire shareholding to Bharti for around $1 billion cash, while Providence will receive a mixture of cash and shares.

Bharti Airtel and Vodafone will jointly control the combined company via a shareholders' agreement. Bharti Airtel's board said that, after the completion of the merger, it will evaluate a strategic stake sale to potential investors. KKR and CPPIB will have one of the 11 seats on the board.

Bharti Infratel shares fell 1.2 percent to 325 rupees by 9:55 a.m. (0425 GMT).

Context News

Bharti Infratel and Indus Towers announced on April 25 a plan to merge, creating the world's largest telecom tower company by number of masts outside of China.

Idea will sell its entire shareholding to Bharti for around $1 billion cash, while Providence will receive a mixture of cash and shares.

Bharti Infratel shares fell 1.2 percent to 325 rupees by 9:55 a.m. (0425 GMT).

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