"The proposed transaction is part of Airtel's strategy to align the shareholding of its customer-facing products, services and businesses under the same holding group. A full control and ownership over Bharti Telemedia allow Airtel to offer differentiated and converged solutions to customers so as to promote 'One Home' strategy," said the company in a statement, according to Bloomberg Quint.
The unit, Bharti Telemedia, was acquired by Lion Meadow Investment, an affiliate of Warburg Pincus back in 2017 and this current buyback comes as Airtel attempts to consolidate its digital consumer products.
Subject to approval from the board, the deal will see Airtel issue 36.5 million shares to a Warburg Pincus company at 600 rupees ($8.27) per share and pay up to 10.38 billion rupees ($143 million) in cash.
"The remaining consideration of Rs 937.8 crore shall be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding Rs 100 crore,” the statement read.
In addition, Bharti Airtel confirms the formation of a special committee to assess options for reorganising the businesses and shareholding structure, stating it would would place suitable recommendations to the Airtel board for consideration and/ or approval”.
"Airtel was one of the earliest and most profitable investments for Warburg Pincus in India. We are delighted to be back as partners in Bharti Airtel through this transaction," said Vishal Mahadevia, managing director and head of Warburg.
“We look forward to capitalising on the broad-based growth that the company is witnessing across its entire portfolio of businesses, including the digital build-outs."
