American Tower Buys Vodafone And Idea's Telecom Towers For $1.2 Bn

Idea Cellular, Vodafone to sell tower businesses to ATC Telecom for ...

Idea Cellular, Vodafone to sell tower businesses to ATC Telecom for ...

Bank of America Merrill Lynch advised Idea on the American Tower deal, while Morgan Stanley advised Vodafone India.

Under this merger, Vodafone India will get an implied enterprise value of Rs. 82,800 crores and Idea Rs. 72,200 crores.

Ever since it entered the market in September previous year, Reliance Jio has been pursuing a strategy of slashing prices to attract subscribers.

"In the long term, we have a positive view on Idea and the deal could be viewed as a positive move with the 40 billion rupee-transaction value aiding Idea in cutting down its balance sheet debt", said Gaurang Shah, Head Investment Strategist at Geojit Financial Services.

(AMT) announced that ATC Telecom Infrastructure Private Limited, its majority owned Indian subsidiary, has agreed with Vodafone India Limited and Idea Cellular Limited to Acquire Tower Businesses for INR 78.5 billion, or about $1.2 billion cash at current exchange rates.

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"The aggregate cash consideration for the transactions is expected to be Rs 78.5 billion, or approximately $1.2 billion at current exchange rates, subject to customary closing adjustments", said the United States based tower company that had earlier acquired Viom Networks, another Indian tower company. It will have revenue of Rs81,600 crore and an operating profit of Rs24,400 crore.

The joint statement by the companies further mentioned that their tower businesses - which are pan-Indian passive telecommunication infrastructure businesses - comprises of about 20,000 towers (combined) with a combined tenancy ratio of 1.65x, as recorded till June 30. Together, Idea Cellular and Vodafone India have a debt of Rs1.08 trillion.

Shares of Idea Cellular were trading at Rs 94.90 a piece, down by 2.22% on the BSE in the early trading hours Monday. Kumarmangalam Birla will be the Chairman of merged Vodafone-Idea entity and both the companies will have equal stakes in the merged entity over a period of time.

The transfer of shares is subject to regulatory approvals and is expected to be completed during the first half of calendar year 2018.

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