Bharti Airtel Wednesday said its tower arm Bharti Infratel has now merged with Indus Towers. The combined entity will be called Indus Towers Limited and will be the largest telecom tower company in the world.
Before the merger, Bharti Infratel had 39,523 towers and Indus Towers has 123,639 towers. Combined, they will be having 163,162 towers and will operate in all 22 circles o fthe country. Earlier, Bharti Infratel and Indus Towers were operating in 7 and 15 circles respectively.
Airtel, in October last year, had announced that its nterested in merging Bharti Infratel with Indus Towers and the deliberations are going on. The new announcement said the closure is subject to approval from the concerned authorities and may happen before March, 2019.
Structure of The New Firm
Bharti Airtel currently holds 53.5% stake in Bharti Infratel and the rest 46.5% are with the public. Indus Towers is joint venture between Bharti Airtel, Vodafone India and Idea Cellular and they hold 42%, 42% and 11.15% respectively in the firm. The rest 4.85% is being held by Providence Group.
Post the merger, Bharti Airtel and Vodafone India will merge their shares to have equivalent shares in the new entity and Idea Cellular will sell its stakes and move out from the new tower company.
In the new company or Indus Towers Limited, Bharti Airtel will have 37.2% stake where as Vodafone will have 29.4%, Providence will have 1.1% and the rest 32.3% will be with the public. The new entity will remain as a listed company and will trade on Indian bourses, a Bharti Airtel statement said.
Bharti Airtel and Vodafone will have equal rights in the combined company. They have entered into a shareholders’ agreement and it is expected that the combined company’s articles of association will be amended at completion to reflect some of these rights.
Following completion, the Board of the combined company will comprise of 11 directors, of whom three will be appointed by each of Bharti Airtel and Vodafone, one will be appointed by KKR/Canada Pension Plan Investment Board and four (including the Chairman) will be independent. The management team will be confirmed prior to closing.