Bharti Televentures UK Ltd, a wholly owned subsidiary of Bharti Enterprises’s international investment arm Bharti Global, will buy the equity from telecom services provider Altice UK..jpeg.jpg?rect=0%2C0%2C1024%2C576&auto=format%2Ccompress&w=1280)
Bharti Televentures UK Ltd, a wholly owned subsidiary of Bharti Enterprises’s international investment arm Bharti Global, will buy the equity from telecom services provider Altice UK, which has a 24.5% stake in BT. Bharti Televentures will buy 9.99% of BT from Altice immediately, and the remaining 14.51% after receiving regulatory clearances.
The companies did not reveal the exact value of the deal. The funds were not connected to Bharti Airtel Limited or any of its subsidiaries, Bharti Enterprises clarified. Altice’s 24.5% stake in BT was worth about £3.2 billion based on the last closing price on the London Stock Exchange, according to the Financial Times. Altice is owned by Israeli-French telecom billionaire Patrick Drahi, who also owns auction house Sotheby’s.
Mittal said, “Bharti and BT have an enduring relationship going back more than two decades, wherein BT owned a 21% stake along with two board seats in Bharti Airtel Limited from 1997-2001. Today marks a significant milestone in Bharti Group’s history as we invest in BT, an iconic British company.”
“This investment in BT aims to support the commitment of our hon’ble prime minister towards his vision in elevating and broadening the India-UK ties. Bharti’s own record of owning and operating telecom and broadband networks around the world is underpinned by placing customers, digital innovation and operational efficiency at the heart of its business,” he added.
FTA talks to conclude soon
India and the UK are expected to conclude their free-trade agreement (FTA) negotiations soon. The talks began in January 2022, and 14 rounds were conducted before the general elections in both countries. The two governments are also negotiating a bilateral investment treaty.
Bharti said the company hoped to create new synergies between the two countries in the areas of artificial intelligence (AI), research and development on 5G, and core engineering, among others.
The UK-India Technology Security Initiative was announced during the recent visit of UK foreign secretary Rt Hon David Lammy to India, the company said, adding that this would help expand collaboration in critical and emerging technologies across priority sectors, including telecom.
Allison Kirkby, chief executive of BT Group, said “We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy. BT has enjoyed a long association with Bharti Enterprises, and I’m pleased that they share our ambition and vision for the future of our business. They have a strong track record of success in the sector, and I look forward to ongoing and positive engagement with them in the months and years to come.”.
Bharti Global, the international investment arm of Bharti Enterprises, on August 12 agreed to purchase a 24.5 percent stake in BT Group Plc from Altice UK, the British telecom firm’s largest shareholder and the investment vehicle of telecom tycoon Patrick Drahi.
This transaction will make Bharti Global the largest shareholder in BT Group. In a move that marks a reversal of roles, Sunil Mittal’s Bharti Enterprises is now poised to acquire a significant stake in BT Group. The British telecommunications giant had invested in Bharti Airtel in 1997. The latest acquisition highlights Bharti Group’s growing global ambitions and plan to strengthen its presence in the international telecom market.
“It’s a big investment in a storied company in a space that we understand,” Bharti Enterprises chairman Mittal .
At current market price, a 24.5 per cent stake purchase is valued at Rs 31,850 crore or roughly $4 billion, making it one the biggest outbound deals struck by an Indian company. The market capitalisation of Bharti Airtel is around Rs 8.26 lakh crore currently, much higher than BT Group’s Rs 1.39 lakh crore.
The transaction price was near the current market price of BT Group, Reuters reported, citing Mittal. Bharti Enterprises has not asked for a board seat, Mittal added.
Drahi first bought into BT in 2021, but his Altice group has come under mounting pressure to sell assets to cut debts of as much as $60 billion, a pile that allowed him to build his media-to-telecoms empire in an era of low interest rates.
BT’s shares have risen by 24 percent in the last six months, as the fruits of its long-term investment plan to build the country’s fibre network start to materialise.
“We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy,” said Allison Kirkby, chief executive officer.
“BT has enjoyed a long association with Bharti Enterprises, and I’m pleased that they share our ambition and vision for the future of our business. They have a strong track record of success in the sector, and I look forward to ongoing and positive engagement with them in the months and years to come,” Kirkby added.
Reacting to the development, Union commerce minister Piyush Goyal said the deal is “testimony to the growing strength of India”.
Reacting to the development, Union commerce minister Piyush Goyal said the deal is “testimony to the growing strength of India”.
Bharti Enterprises also owns Bharti Airtel, India’s second-largest telecom operator with operations in Africa.
Bharti Enterprises said it would acquire an initial 9.99 percent stake before seeking to acquire the remaining 14.51 percent following regulatory approvals, including voluntarily applying for clearance under the UK National Security and Investment Act.
Moreover, Bharti also said that it had no intention of making an offer to acquire the whole of BT, the former state monopoly of Britain’s biggest broadband and mobile company.
“This investment demonstrates the confidence we have in BT and in the UK,” Mittal said in a statement.
Timotheus Höttges, chief executive of Deutsche Telecom, which owns 12 percent of BT Group, described Bharti Global’s stake purchase as a “positive step for BT”.
“We have a long and good working relationship with Bharti. So we are looking forward to working together with Bharti and the Board of Directors for the sake of BT shareholders and customers,” Höttges said.
According to the Mittal-led group, this investment will further help create “new synergies in the telecom sector between both countries in the areas of AI and 5G R&D and core engineering amongst others”.
“We review global investment opportunities in the world of technology from digital infrastructure to software. BT is well known to us from the long association with Bharti, so we are pleased to have this opportunity to acquire a significant stake in the company,” said Shravin Bharti Mittal, managing director of Bharti Global.
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