Bharti Airtel to merge with Tata telecom business

Mindy Sparks
October 12, 2017

Mumbai: Bharti Airtel Ltd is acquiring the Tata conglomerate's consumer mobile business, the two companies said on Thursday, in a deal that gives India's top wireless player a major subscriber base boost for virtually free, while stemming the bleed for Tata from a loss making venture.

"Instead of closing down the consumer mobile business, which would have entailed a much higher cost and involved letting go of employees and vendors etc, we have chosen this route", Tata Group chief financial officer Saurabh Agrawal told PTI. Reports state that the acquisition is subject to requisite regulatory approvals, the statement said without revealing the acquisition amount.

The merger of Tata Teleservices into Bharti Airtel will not result in any cash outgo from Bharti Airtel, the company said in a statement. He further said that on completion, the proposed acquisition will undergo seamless integration; both on the customer as well as the network side, and further strengthen our market position in several key circles.

"Bharti Airtel will ensure quality services to Tata CMB's customers, while offering them the added benefits of its innovative product portfolio, access to superior voice & data services, mobile banking, VAS and domestic/ worldwide roaming facilities".

"The acquisition of additional spectrum made an attractive business proposition".

The Boards of Bharti Airtel, Tata Sons, TTSL and TTML have approved the transaction.

"We believe today's agreement is the best and most optimal solution for the Tata Group and its stakeholders", said N Chandrasekaran, chairman, Tata Sons.

Also, the Bharti Airtel-Tata Tele combined entity would have a share of around 40 per cent in the total telecom revenues, not much behind the projected 44 per cent for the Idea-Vodafone combine.Airtel has got TTSL in virtually a platter - it just has to pay 15 per cent to 20 per cent of the deferred payment for spectrum which comes to around Rs 1500-Rs 2,000 crore.

Goldman Sachs (India) Securities Private Limited is financial adviser to Tata.

The transaction will create substantial long-term value for shareholders given the significant synergies, he said.

Other reports by Iphone Fresh

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