- Thursday, February 06, 2025
The telecom major did not disclose financial details, but market watchers say that at BT’s valuation of roughly $15 billion, the deal could be approximately $4 billion
By: Shajil Kumar
TELECOM czar Sunil Bharti Mittal’s conglomerate will buy a 24.5 per cent stake in Britain’s largest broadband and mobile company, BT Group, worth about $4 billion (£3.13bn).
Bharti Global, the international investment arm of Bharti Enterprises, will buy 9.99 per cent stake in BT Group from Patrick Drahi’s Altice immediately and purchase the remainder after it has secured the necessary regulatory approvals, the firm said in a statement.
It, however, did not disclose financial details but market watchers say that at BT’s valuation of roughly $15 billion, the deal could be in the ballpark of $4 billion range.
Bharti, India’s second largest telecom operator with about 400 million subscribers, has had a relationship with BT previously as well. BT owned a 21 per cent stake in Bharti Airtel from 1997 to 2001.
The company is neither keen on making an offer to acquire the whole of BT, nor is it seeking a board position.
Altice, an investment conglomerate controlled by billionaire Drahi, is exiting BT as it struggles with high debt.
It first took a stake in BT in 2021, acquiring a 12 per cent holding, which later increased to 24.5 per cent.
BT’s shares have fallen by about a third since Altice first became an investor.
“Bharti Global, the international investment arm of Bharti Enterprises, has reached an agreement to acquire an interest in 24.5 per cent of the issued share capital of BT Group Plc from Altice UK,” Bharti said in a statement.
Bharti hopes the investment will further help create new synergies in the telecom sector between India and the UK in the areas of AI and 5G R&D and core engineering among others, “offering great potential to collaborate on industry best practices and emerging technologies”.
Sunil Bharti Mittal, Chairman of Bharti Enterprises said: “Bharti and British Telecom (BT) have an enduring relationship going back more than two decades wherein BT owned 21 per cent 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”.
Mittal said: “This investment in BT aims to support the commitment of our Prime Minister towards his vision in elevating and broadening the India-UK ties.”
Shravin Bharti Mittal, Managing Director of Bharti Global said: “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.”
Bharti believes that BT is poised for leadership in the telecom arena, especially home broadband services, he added.
‘Vote of confidence’
Meanwhile, BT Group, in a separate statement said the investment from Bharti is a strong vote of confidence in the future of the British telecom carrier and its strategy.
Allison Kirkby, Chief Executive of BT 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,” Kirkby said.
Barclays Bank PLC, acting through its Investment Bank served as the sole financial advisor and Linklaters LLP served as legal advisor to Bharti Global in connection with the transaction.
India Inc’s UK footprint
Bharti Enterprises has joined the list of Indian companies buying firms in the UK since the turn of the millennium.
Unsurprisingly, the list of Indian companies acquiring firms in the UK is dominated by salt-to-software conglomerate Tata Group with another homegrown group Mahindra & Mahindra along with home textiles to infrastructure major Welspun and TVS finding prominent places.
Tata Tea was the first to pull off what was then “the biggest acquisition in the Indian corporate history” by acquiring Britain’s most popular tea and the second largest global tea brand Tetley for £271 million in February 2000. Tetley was famous for its TV advertisements featuring the Tetley tea folk. At that time Tata Tea was much smaller than Tetley.
In a pursuit that lasted over five years, including a heartbreak of losing out to a team of venture capitalist firms in the first instance in 1995, the perseverance of the then leadership of the Tata Group, including then Chairman Ratan Tata and Tata Tea Managing Director RK Krishna Kumar, finally paid off when the new owners — the venture capitalist firms — decided to sell Tetley and offered it to the Tata Tea.
Thus in January 2000, history was made in the Indian corporate landscape when Tetley became under the Tata fold.
Six years later, in July 2006, B K Goenka-spearheaded Welspun India Ltd acquired an 85 per cent interest in CHT Holdings Ltd, the holding company of Britain’s leading terry towel brand, Christy.
It gave Welspun group access to the premium, high-end Christy brand as also to the UK and European markets in its first step towards becoming a global home textile company.
As the Tata Group continued its global expansion drive in the first decade of the 21st century, Tata Steel won a takeover battle against Brazil’s Companhia Siderúrgica Nacional (CSN) to acquire Anglo-Dutch steelmaker Corus Group Plc for $12-billion (£9.40bn).
After a bidding war, in January 2007 Tata Steel won the fight and completed the acquisition in April the same year. Tata Steel’s cash offer of 608 pence a share was better than CSN’s bid of 603 pence a share.
The acquisition of Corus, then Britain’s largest steelmaker, not only catapulted the Indian conglomerate to the global corporate centre-stage, but also gave other domestic companies the self-belief of taking on multinationals much bigger in size.
A year later in June 2008, Tata Motors announced completion of the acquisition of British carmaker Jaguar Land Rover from Ford Motor Company for a net consideration of $2.3 billion (£1.80bn), after announcing the deal in March, in an all-cash transaction.
Ratan Tata described the acquisition as “a momentous time for all of us at Tata Motors” while promising to retain the distinctive identities of Jaguar and Land Rover and continue to pursue their respective business plans as before.
Later on, in October 2016, another homegrown conglomerate Mahindra & Mahindra announced the acquisition of UK-based two-wheeler maker BSA Company for £3.4 million.
The acquisition was carried out through Classic Legends Pvt Ltd, an arm of M&M, enabling it acquire/obtain licence of the BSE brand and utilise the same for selling, marketing, distributing motorcycles globally.
The principal activity of BSA is licensing of brands related to motorcycles. Incorporated in the UK, the company also has presence in Japan, Singapore, Malaysia, the US, Mexico and Canada.
In April 2020, Chennai-based TVS Motor Company joined the list with the acquisition of UK-based iconic bike maker Norton Motorcycles for £16 million in an all cash deal. (PTI)
