Sunil Mittal-led mobile infrastructure major Bharti Infratel has announced the merger with Indus Towers to create a combined entity with an equity value of Rs 96,500 crores ($14.6bn), making it the world’s second largest telecom tower company after Beijing-owned China Tower, with more than 163,000 towers and having presence in all the 22 circles in India, reported Business Standard and Mint.

The deal is subject to approvals from regulatory authorities and Bharti Infratel’s shareholders and other customary closing conditions is expected to be completed by the end of the current financial year and will also see telecom companies Bharti Airtel, Idea Cellular and Vodafone group along with private equity firm Providence Equity Partners merge their respective shareholdings in Indus Towers into Bharti Infratel. The combined entity will be called Indus Towers and will continue to be listed in the Indian bourses with Bharti Infratel offerring 1,565 shares for every one share of Indus Towers.

S&R Associates advised Vodafone in the transaction and was led by partners Rajat Sethi, Tanya Aggarwal and Radhika Iyer along with associates Shivaji Bhattacharya, Dhruv Nath, Jagriti Mohata, Raya Hazarika, Meher Mehta, Sushmita Sur and Apoorv Chaturvedi on M&A, corporate and regulatory matters while associates Simran Dhir, Dhruv Agarwal and Natasha Aggarwal assisted on competition law matters.

Slaughter and May also acted as legal advisors to Vodafone, working closely with the Vodafone in-house legal team.

AZB & Partners acted for Bharti Infratel and was led by partners Gautam Saha, Sachin Mehta and Amrita Patnaik; tax structuring: partners Ajay Bahl and Ravi Prakash; scheme/NCLT: partners Abhinav Ashwin and Bharat Apte; competition team: partner Samir Gandhi. Also involved were associates Punita Gupta, Aditi Gopalakrishnan and Akshat Kulshrestha.

Bharucha & Partners advised Idea in the transaction, represented by partner Alka Bharucha.

Update 2 May 2018: Nishith Desai Associates (NDA) acted as legal and tax counsel for Providence, a private equity fund and an existing shareholder of Indus, with NDA leaders Vaibhav Parikh, Simone Reis and Rajesh Simhun and senior associate Shreyas Bhushan.

Indus Towers, jointly owned by Bharti Infratel (42%), Vodafone (42%), Idea Group (11.15%) and Providence (4.85%), currently operates in 15 telecom service areas in India while Bharti Infratel operates in the remaining 7 circles. As per the press release by Vodafone, the strategic combination of Bharti Infratel and Indus Towers, with their highly complementary footprints is expected to create a pan-India tower company with the ability to offer high quality passive infrastructure services to all operators on a non-discriminatory basis, needed to support the pan-India expansion of wireless broadband services using 4G/4G+/5G technologies.

Post the merger, the newly-formed entity will be jointly promoted by Bharti Airtel and Vodafone Group, while Idea Cellular will have the option to fully exit and sell its entire stake for a cash consideration of Rs 6,500 crores ($1bn), whereas Providence will have the option to sell only part of their stake in Indus Towers or acquire shares in the combined company.

2018-04-25

This deal report is based on a firm's press release and may be only partially complete. Some firms or names of advisers may be therefore be missing.