Sunil Bharti Mittal’s Bharti Enterprises is taking a big bet in the UK, with a deal to buy a 24.5 per cent stake in BT Group Plc for about $4 billion.
The Indian conglomerate is buying the stake from Altice, the investment vehicle of billionaire Patrick Drahi.
The shares will be purchased through Bharti Televentures UK Ltd — a company established and wholly owned by Bharti Global, which is the international investment arm of Bharti Enterprises.
Bharti Televentures UK Ltd has entered into a binding agreement with Altice UK to acquire a 9.99 per cent stake of BT Group’s issued capital imminently with the balance 14.51 per cent of BT’s share capital to be acquired following the receipt of applicable regulatory clearances.
The telecom major, 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.
The acquisition comes as BT is undergoing a transformation to focus on broadband and enterprise services. The investment by Bharti is a vote of confidence in the company’s turnaround plan.
“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,” Bharti Enterprises chairman Sunil Mittal said in a statement.
The company is neither keen on making an offer to acquire the whole of BT, nor is it seeking a board position.
Bharti sees opportunities to collaborate with BT in areas such as artificial intelligence, 5G and other emerging technologies.
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.”
BT Group said the investment from Bharti is a strong vote of confidence in the future of the British telecom carrier and its strategy.
