Airtel to Take 20% Stake in Bharti Telemedia from Warburg Pincus

Bharti Airtel (Airtel) will acquire a Warburg Pincus affiliate’s 20 percent equity stake in its DTH arm Bharti Telemedia for a total consideration of Rs.31,260 million. This will be discharged primarily via issuance of nearly 36.47 million equity shares of Airtel at a price of Rs.600 per share; and up to Rs.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 percent to the floor price determined as per ICDR regulations. The remaining consideration of nearly Rs.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 Rs.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.”

Citigroup Global Markets India Private Limited (Citi) acted as the financial advisor to Airtel, while Credit Suisse Securities (India) Private Limited acted as advisors to Warburg Pincus in connection with this transaction.