Airtel’s biggest bet
Bharti Airtel veteran Sunil Bharti Mittal is set to make a big bet in the telecom sector. Sunil Bharti Mittal’s group is set to buy 24.5 per cent of Britain’s largest broadband and mobile company, British Telecom. The deal is expected to be valued at around $4 billion.
According to the company, Bharti Global, the global investment arm of Bharti Enterprises, will immediately buy a 9.99 per cent stake in BT Group from Patrick Drahi’s Altais and will acquire the remaining stake after obtaining regulatory approval. Though the company did not disclose the size of the deal, market experts say that with BT’s valuation of around $15 billion, this deal could be worth around $4 billion.
Second largest telecommunications company
read this too
Bharti Airtel is the second largest telecom company in India. This company has around 40 million customers. Bharti Enterprises has also had a relationship with British Telecom in the past. In fact, from 1007 to 2001, there was a 21 percent stake in Bharti Airtel. The company has no intention of making any bid to acquire BT directly nor is it seeking a seat on its board.
Why is this agreement made?
Altais, the investment group controlled by billionaire Drahi, is pulling out of BT as it grapples with high debt. It first took a stake in BT in 2021. It subsequently acquired a 12 per cent stake, increasing its stake to 24.5 per cent. BT shares have fallen by about a third since Altais first became an investor.
What did the company say?
Issuing a statement, Bharti said that Bharti Global is the international investment arm of Bharti Enterprises, a leading Indian business group with global businesses in telecom, digital communications and space. It has signed an agreement to acquire a 24.5 per cent stake in BT Group from Altais UK. Earlier, British Telecom had acquired a 21 per cent stake in Bharti Airtel in 1997 and now Bharti plans to acquire a 24.5 per cent stake in this prestigious British company. This could prove to be a milestone for the Indian telecom group.
decades-old relationship
Sunil Bharti Mittal, Chairman of Bharti Enterprises, says that there has been a relationship between Bharti and British Telecom for over two decades. BT had two members on the board of Bharti Airtel Limited between 1997 and 2001 and owned 21 per cent of the shares. Today is an important moment in the history of the Bharti Group because we are investing in BT, which is an iconic British company. Bharti says that the company has been looking at global investment opportunities in the world of technology, from digital infrastructure to software. Having been associated with Bharti for a long time and knowing BT well, we are pleased to have this opportunity to acquire a significant stake in the company.
There will be changes in the telecommunications sector
Bharti believes that BT is poised to lead the telecoms sector, especially in home broadband services. Meanwhile, BT Group said in a separate statement that Bharti’s investment is a strong signal of confidence in the future of the British telecoms company and its strategy. BT Chief Executive Alison Kirkby said: “We welcome investors who understand the long-term vision of our business. This investment by Bharti Global is a great signal of confidence in the future of BT Group and our strategy. Barclays Bank plc, through its investment bank, acted as sole financial advisor in connection with this transaction. Linklaters LLP acted as legal advisor to Bharti Global.
