Airtel-Tata merger on cards: Bharti Airtel in talks with Tata Group to combine DTH biz of Bharti Telemedia, Tata Play | Stock Market News
Airtel-Tata merger: Bharti Airtel confirmed on Wednesday, February 26, that it is currently in discussions with the Tata Group to explore a deal to merge Tata Play’s direct-to-home (DTH) business with its subsidiary Bharti Telemedia Ltd. Sunil Mittal-led telecom operator announced in a regulatory filing to the stock exchanges today after certain reports indicated yesterday that the upcoming DTH deal would likely be through a merger swap.
“We wish to submit that Bharti Airtel Ltd and TATA Group are in bilateral discussions to explore a potential transaction to achieve a combination of TATA Group’s Direct To Home (‘DTH’) business housed under Tata Play Limited, with Bharti Telemedia Ltd, a subsidiary of Airtel, in a structure acceptable to all parties. The above is at a discussion stage only,” said Bharti Airtel in a regulatory filing to the stock exchanges on Wednesday evening.
The Economic Times reported that the deal would likely be through a merger swap, with Airtel holding over 50 percent stake in the merged entity. The merger will help Airtel grow its revenue in the non-mobile segment.
The report also said the merger would help Airtel gain access to nearly 20 million homes via Tata Play’s connections. It would lead to service providers clubbing broadband, telecom and DTH plans into a single subscription. The deal would be the second high-stakes agreement in the space after the 2016 merger of Videocon d2h and Dish TV.
ET had reported that the proposed merger would happen through a share swap and help boost Airtel’s non-mobile revenues through convergence. As per the ET report, Airtel will hold a majority stake of around 52-55% in the combined entity while Tata Play shareholders, including Walt Disney, would hold 45-48%.
The combined entity is likely to be run by Airtel’s senior management though Tata is learnt to have sought two board seats, the ET report added.
The merged entity would likely to be run by the senior management of Airtel, the report said. Tata would hold two board seats under the non-binding agreement. The operations of the merged entity were reportedly being valued at around ₹7,000 crore. Disney would continue to own shares in the combined entity.
