Bharti Airtel Ltd said on Wednesday it will buy back US private equity firm Warburg Pincus’ 20% stake in its direct-to-home television unit for ₹3,126 crore.
Warburg Pincus had in December 2017 acquired the 20% stake in Bharti Telemedia Ltd for ₹2,258 crore.
As part of the latest deal, Airtel will issue 36.47 million of its own equity shares at ₹600 apiece to Warburg Pincus and pay ₹1,037.8 crore in cash. The share issuance, which will be done through a preferential allotment, is subject to shareholders’ approval.
“A full control and ownership over Bharti Telemedia will allow Airtel to offer differentiated and converged solutions to customers to promote ‘one home’ strategy,” the New Delhi-based company said in a statement.
The proposed deal is part of Bharti Airtel’s strategy to consolidate its customer-facing products, services and businesses under the same holding group.
“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,” said Harjeet Kohli, group director, Bharti Enterprises.
Airtel, India’s second-largest operator by market share, has had a “close and strategic partnership” with Warburg Pincus across business verticals and geographies, he said. “We are delighted to have them back as part of Airtel’s exciting journey ahead, including digital businesses.”
Bharti Airtel will issue its shares to a Warburg Pincus affiliate at a premium of about 0.5% to a floor price calculated as per Sebi norms.
“We look forward to capitalizing on the broad-based growth that the company is witnessing across its entire portfolio of businesses, including the digital build-outs,” said Vishal Mahadevia, managing director and head, Warburg Pincus India.
At its board meeting, Bharti Airtel also formed a special committee of directors to study various options for reorganization of the businesses and holding of units. The committee will also evaluate a rejig of subsidiaries to increase focus on digital and non-telecom businesses of the company, Airtel said in a separate statement.
