Indus Towers, Bharti Infratel to merge; new entity will be largest mobile tower operator outside China

New Delhi: Bharti Airtel, Idea Cellular and Vodafone Group today announced an agreement for merger of Indus Towers and Bharti Infratel to create the largest mobile tower operator in the world outside China with over 163,000 towers across 22 telecom service areas. “The combined company, which will fully own the respective businesses of Bharti Infratel and Indus Towers, will change its name to Indus Towers Limited and will continue to be listed on Indian Stock Exchanges,” Bharti Group said in a statement announcing the joint deal. The combined company will own 100 percent of Indus Towers. Indus Towers is currently jointly owned by Bharti Infratel (42 percent holding), Vodafone (42 percent), Idea Group (11.15 percent) and Providence (4.85 percent). Post 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. [caption id=“attachment_4263851” align=“alignleft” width=“380”]  Representative image. Reuters[/caption] 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, the statement added. Detailing out the structure of the deal, it said, Vodafone will be issued 783.1 million new shares in merged entity in exchange for its 42 percent stake in Indus Towers, and this could take its holding to 29.4 percent in new company depending on options finally taken by Idea and Providence. Similarly Airtel’s stake in new combined tower behemoth may be diluted to 37.2 percent in combined entity from 53.5 percent it currently holds on Bharti Infratel. The new company will be the largest tower company in the world outside China, the statement added. The transaction values Indus Towers at enterprise value of Rs 71,500 crore, the statement said adding that the merger ratio is 1,565 shares of Bharti Infratel for every 1 Indus Towers share.