Bharti Enterprises’ Chairman Sunil Mittal has indicated that the Indian conglomerate may explore additional investment opportunities in Europe following its acquisition of a 24.5% stake in BT Group. The move, valued at approximately $4 billion, marks a significant step in Bharti’s global expansion strategy and is seen as a strong signal of Indian business groups’ readiness to make substantial investments on the international stage.
Details:
Strategic Move: Bharti Global, the international arm of Bharti Enterprises, is acquiring a 24.5% equity stake in BT Group from Altice UK. This acquisition includes an immediate purchase of 9.99% of BT’s shares and the remaining 14.51% pending regulatory approval. This strategic investment positions Bharti as the largest shareholder in BT Group.
Government Support: Sunil Mittal emphasized that the Indian government supports Indian companies’ global expansion, encouraging them to seize international opportunities. Bharti operates in 16 countries and views its entry into the UK and European markets as a strategic expansion.
Investment Rationale: Mittal noted that the European telecom market presents attractive opportunities, with companies like BT trading at low multiples. Bharti’s investment is intended to capitalize on this favorable market condition while supporting its strategic goals.
Historical Context: Bharti’s acquisition marks a full circle as BT previously held a 21% stake in Bharti Airtel from 1997 to 2001. Mittal clarified that Bharti does not intend to seek management control or board positions at BT, focusing instead on supporting the company’s strategy and operations.
Regulatory Considerations: Bharti Global has applied for clearance under the UK’s National Security and Investment Act, reflecting a commitment to regulatory compliance and transparency.
Future Prospects: Mittal indicated that Bharti may pursue further investment opportunities in Europe, particularly in the telecom sector. Any future telecom-related expansion will be managed through Bharti Airtel, with a focus on strengthening its position in India before exploring additional international ventures.
Sector Insights: The acquisition aligns with Bharti’s broader strategy to leverage its strong financial position and experience in the telecom sector to create new synergies and capitalize on growth opportunities in Europe.
Government and Industry Reactions: The Indian government, including Commerce and Industries Minister Piyush Goyal and the Indian High Commissioner to the UK, Vikram Doraiswami, praised the acquisition. Deutsche Telekom, a significant shareholder in BT, also welcomed the move, expressing a positive outlook for collaboration.
Bharti’s Other Investments: Bharti Global’s other investments in the UK include the satellite communications company OneWeb and various hospitality assets such as The Hoxton and Gleneagles. The group continues to explore opportunities in emerging technologies and sector collaborations.
Bharti’s substantial investment in BT Group reflects a strategic push into European markets and aligns with its long-term global expansion goals. The move is expected to strengthen Bharti’s presence in the international telecom sector while supporting the broader India-UK business relationship.