Airtel to take full control of DTH biz by acquiring Warburg Pincus' 20% stake
The deal will be worth Rs 3126 crore
Bharti Airtel, India’s premier Digital communications Company, today said that it will acquire a Warburg Pincus affiliate’s 20% equity stake in its DTH arm Bharti Telemedia for a total consideration of Rs 3126 crore which will be discharged primarily via issuance of 36.47 million equity shares of Airtel at a price of Rs 600 per share and up to Rs 1037.8 crore in cash.
The issuance of shares proposed through preferential allotment is subject to shareholders’ approval.
In December 2017, a Warburg Pincus affiliate had agreed to acquire a 20% equity stake in Bharti Telemedia Limited, the DTH arm of Airtel, for approximately $350 million.
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. Full control and ownership over Bharti Telemedia allows Airtel to offer differentiated and converged solutions to customers so as to promote the “One Home” strategy.
Airtel's DTH subscriber base stood at 17.87 million, as of 31st December 2020. The DTH arm's Average Revenue Per User (ARPU) was Rs 149 in Q3.
Bharti Enterprises Group Director Harjeet Kohli 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 Rs 937.8 crore shall be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding Rs 100 crore.
Warburg Pincus India Managing Director and Head Vishal Mahadevia 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.”
Citigroup Global Markets India 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.
