MUMBAI: Bharti Infratel and Indus Towers have merged to create a listed pan-India tower company, which will be the largest tower company in the world outside China.
The combination will make a tower company with over 163,000 towers, operating across all 22 telecom service areas in India. The combined company, which will fully own the respective businesses of Bharti Infratel and Indus Towers, will change its name to Indus Towers Ltd and will continue to be listed on the Indian stock exchanges, said an official statement.
Indus Towers is currently jointly owned by Bharti Infratel (42 per cent), Vodafone (42 per cent), Idea Group (11.15 per cent) and Providence (4.85 per cent).
The combination of the two companies’ highly complementary footprints will create a tower operator with the ability to offer the high quality shared passive infrastructure services needed to support the pan-India expansion of wireless broadband services using 4G/4G+/5G technologies for the benefit of Indian consumers and businesses.
The official statement added that the combined company will continue to offer high quality passive infrastructure services to all telecom operators on a non-discriminatory basis, thus helping to support the delivery of the Government of India’s vision of ‘Digital India’.
“The merger ratio which stipulates 1,565 shares of Bharti Infratel for every one Indus Towers share, is within the range recommended by the independent valuer,” added the statement.
As per the agreement arrived at, Idea Group has the option to either: (i) sell its 11.15 per cent shareholding in Indus Towers for cash based on a valuation formula linked to the volume-weighted average price (VWAP) for Bharti Infratel’s shares during the 60 trading days prior to completion of the merger, which, if calculated at the time of this announcement, would equate to a cash consideration of Rs65billion ($1billion), or alternatively, (ii) receive new shares in the combined company based on the merger ratio.
Idea has made it clear that all proceeds from the sale of the 11.15 per cent stake will be used for the benefit of the entity resulting from the merger of Vodafone India and Idea Group.
Bharti Airtel and Vodafone will jointly control the combined company in accordance with the terms of a new shareholders’ agreement. The transaction is conditional on regulatory and other approvals, including from CCI, SEBI, NCLT, DoT (FDI approval), and is expected to close before the end of the financial year ending March 31,2019.