Traffic passes mobile phone telecommunications towers in Mumbai (Photographer: Dhiraj Singh/Bloomberg)

Bharti Infratel, Indus Tower Merger Deal Gets SEBI Nod

Bharti Infratel Ltd. has received clearance from the stock exchanges for its merger with Indus Towers. The company will now approach the National Company Law Tribunal for its approval, said the mobile tower arm of telecom major Bharti Airtel Ltd. in a filing today.

“We are pleased to inform you that ‘no adverse observation’ letter has been received from the stock exchange for the proposed merger of Bharti Infratel and Indus Towers. The company will file the first motion petition before the NCLT in due course,” Bharti Infratel said in a filing at the BSE and the National Stock Exchange.

In April this year, Bharti Airtel, Idea Cellular and Vodafone Group had announced an agreement for the merger of Indus Towers and Bharti Infratel to create the largest mobile tower operator in the world outside China. It will have over 1.63 lakh towers across 22 telecom service areas in India.

The combined company will own 100 percent of Indus Towers—jointly owned by Bharti Infratel (42 percent holding), Vodafone (42 percent), Idea Group (11.15 percent) and Providence (4.85 percent).

After the deal, Bharti Airtel and Vodafone will jointly control the combined company, and the transaction is expected to close before the end of 2018-19, subject to statutory approvals.

Also read: Bharti Infratel-Indus Tower Merger Explained

The deal gives Idea Group an option to sell its 11.5 percent stake in Indus Towers for cash or in lieu of receiving new shares.

Providence, too, has the option to receive cash or shares for 3.35 percent of its 4.85 percent shareholding in Indus Towers with balance exchanged for shares.

According to the deal structure, Vodafone will be issued 783.1 million new shares in the merged entity in exchange for its 42 percent stake in Indus Towers, and this could take its holding to 29.4 percent in the new company depending on the options finally taken by Idea and Providence.

Similarly, Airtel’s stake in new combined tower behemoth may be diluted to 37.2 percent in the combined entity from 53.5 percent it holds in Bharti Infratel. The transaction values Indus Towers at an enterprise value of Rs 71,500 crore.

Also read: Bharti Infratel, Indus Towers May Invest Rs 3,500 Crore Capex Ahead Of Merger