Bharti Global, the international investment arm of Bharti Enterprises, is set to acquire a 24.5% stake in BT Group from Altice UK. This investment, valued at approximately $4 billion, will make Bharti the largest shareholder in BT. The acquisition underscores Bharti’s commitment to expanding its global footprint while enhancing the India-UK business relationship.
Bharti Global has announced a strategic move to purchase a 24.5% equity stake in BT Group, the UK’s second-largest telecom provider. The shares, acquired from Patrick Drahi’s Altice UK, will be bought through a mix of cash and debt. The total transaction amount is estimated at $4 billion, based on BT Group’s current market valuation of $16.6 billion.
Key Points:
- Investment Structure: The purchase will be executed in two phases. Bharti will immediately acquire a 9.99% stake in BT Group, with the remaining 14.51% to be acquired pending regulatory approvals. The financial specifics of the transaction have not been disclosed.
- Historical Context: Bharti Enterprises and BT Group have a historical connection, with BT previously owning a 21% stake in Bharti Airtel from 1997 to 2001.
- Regulatory Review: Bharti is voluntarily applying for clearance under the UK’s National Security and Investment Act, reflecting its commitment to transparent and compliant investment practices.
- Strategic Impact: Sunil Bharti Mittal, Chairman of Bharti Enterprises, emphasized that this investment aligns with the group’s broader strategy of leveraging its strong foundation in India to support and enhance operations in the UK. He noted that Bharti would not seek a board position or attempt a full acquisition of BT.
- Market Reaction: Following the announcement, BT Group’s shares experienced an 8.5% increase, closing at 141.50p. This uptick reflects positive market sentiment regarding the deal.
- Government and Industry Reactions: British Prime Minister Keir Starmer and Foreign Secretary David Lammy were acknowledged for their support in strengthening India-UK business ties. Deutsche Telekom, which holds a 12% stake in BT Group, also welcomed the investment, viewing it as a positive step for BT’s future.
- Future Prospects: Shravin Mittal, Managing Director of Bharti Global, highlighted BT’s strong portfolio and strategic potential, particularly in areas such as AI, 5G R&D, and core engineering. Bharti Global’s previous investments in the UK, including the successful merger of OneWeb with Eutelsat and acquisitions in the hospitality sector, reinforce its commitment to long-term global investments.
BT Group provides a wide range of telecom services, including broadband, mobile, TV, networking, and IT solutions. The company also has a diverse portfolio spanning handsets, gaming, and insurance. Bharti’s investment is seen as a strategic move to capitalize on BT’s potential leadership in home broadband and other telecom sectors.