Bharti Infratel and Indus Towers merge to create India’s largest tower company

Bharti Airtel has approved the merger of Indus Towers with Bharti Infratel in a deal that will create the largest tower company in India. Operationally, the combined entity, to be called Indus Towers Limited, will control more than one-third of the country’s tower industry. The transaction is expected to close before the end of financial year 2018-19. Indus Towers is currently jointly owned by Bharti Infratel (42 per cent), Vodafone (42 per cent), Aditya Birla’s Idea Group (11.15 per cent) and Providence (4.85 per cent). The merger ratio for the deal will be 1,565 shares of Bharti Infratel for every one share of Indus Towers. Bharti Airtel and Vodafone will jointly control the combined entity, in accordance with the terms of a new shareholders’ agreement. Idea Cellular, which holds 11.15 per cent in Indus, has the option to get a 7.1 per cent stake in the new entity or sell out for Rs 65 billion. Depending on the option chosen by Idea, Bharti Airtel will either own 37.2 per cent or 33.8 per cent, and Vodafone will hold either 29.4 per cent or 26.7 per cent. Private equity major KKR and CPPIB will together hold 6 per cent. Providence will retain a minimum 1.1 per cent or opt to retain its full stake in the combined entity, which will be 3.1 per cent. The remaining shareholding will be in the hands of the public.