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Digital communications Company Bharti Airtel will acquire a Warburg Pincus affiliate’s 20% equity stake in its DTH arm Bharti Telemedia.

It will buy for a total consideration of Rs 3,126 crore which will be discharged primarily via issuance of  about 36.47 million equity shares of Airtel at a price of Rs 600 per share; and up to Rs 1,037.8 crore in cash.

The issuance of shares proposed through preferential allotment is subject to shareholders’ approval.

The proposed transaction is part of Airtel’s strategy to align the shareholding of its customer facing products, services and businesses under the same holding group. A full control and ownership over Bharti Telemedia allows Airtel to offer differentiated and converged solutions to customers so as to promote ‘One Home’ strategy.

Bharti Enterprises Group Director Harjeet Kohli said, “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.”

Airtel will issue its shares to the Warburg Pincus affiliate at a premium of 0.50% to the floor price determined as per ICDR regulations. The remaining consideration of Rs 937.8 crore shall be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding Rs 100 crore.

Warburg Pincus India Head and Managing Director Vishal Mahadevia  said, “Airtel was one of the earliest and most profitable investments for Warburg Pincus in India. We are delighted to be back as partners in Bharti Airtel through this transaction. We look forward to capitalising on the broad-based growth that the company is witnessing across its entire portfolio of businesses, including the digital build-outs.”

In December 2017, a Warburg Pincus affiliate, agreed to acquire 20% equity stake in Bharti Telemedia Limited, the DTH arm of Airtel.

Citigroup Global Markets India Private Limited acted as the financial advisor to Airtel and Credit Suisse Securities (India) Private Limited acted as advisors to Warburg Pincus in connection with this transaction.

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