Bharti Airtel, Idea Cellular (along with its subsidiary ABTL, “Idea Group”) and Vodafone Group on Wednesday said that they have agreed to merge Vodafone’s, Idea Group’s and Providence Equity Partners’ respective shareholdings in Indus Towers Ltd (“Indus Towers”) into Bharti Infratel creating a combined company that will own 100 per cent of Indus Towers.
The combination of Bharti Infratel and Indus Towers by way of merger will create a pan-India tower company, with over 1.63 lakh towers, operating across all 22 telecom service areas in India. The combined company will be the largest tower company in the world outside China.
Pro forma for the transaction, the combined company’s equity value would be Rs. 6,500 crore.
In a statement, Airtel said the final number of shares issued to Vodafone and the cash paid or shares issued to Idea Group and Providence, will be subject to closing adjustments, including but not limited to movements in net debt and working capital for Bharti Infratel and Indus Tower.
Bharti Airtel and Vodafone will jointly control the combined company, in accordance with the terms of a new shareholders’ agreement, it said.
Indus Towers is currently jointly owned by Bharti Infratel (42 per cent), Vodafone (42 per cent), Idea Group (11.15 per cent) and Providence (4.85 per cent).
The transaction will be structured as -- Indus Towers will be merged with into Bharti Infratel through a scheme of arrangement; the merger ratio of 1,565 shares of Bharti Infratel for every one Indus Towers share is within the range recommended by the independent valuer.
Based on the SEBI pricing guidelines for Bharti Infratel, in relation to the proposed scheme, as of April 23 (Rs. 363 per share), the merger ratio implies an enterprise value for Indus Towers of Rs 71,500 crore.
It is intended that Idea Group will sell its 11.15 per cent shareholding for cash concurrent with completion of the scheme, the company said.