Bharti to buy 24.5% stake in UK mobile services provider BT

Bharti Global, the international investment arm of Bharti Enterprises Ltd, on Monday said it will buy a 24.5% stake in the UK’s largest mobile and broadband services provider, BT group, from telecom services provider Altice UK for £3.2 billion (about $4 billion).

Bharti Televentures UK Ltd, a wholly owned subsidiary of Bharti Global, will buy a 9.99% stake in BT from Altice immediately, and another 14.51% after receiving regulatory clearances, the company said.

“We welcome investors who recognize the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy,” Allison Kirkby, chief executive officer at BT, said in a statement.

Shares of Bharati Airtel rose 0.41% on Tuesday.

Bharti chairman Sunil Mittal said the Indian telecom has come full circle by acquiring the BT shares. The British telecom group had held a 21% stake in Bharti Airtel between 1997 and 2001, and now, Bharti group has become the single largest shareholder in the entity.

At an interaction with the media following the development, Mittal said all telecom-related expansion by the group would be done through Airtel, and that the telecom will focus on strengthening its position in India over the next two to three years before it begins to reexamine opportunities outside India.

Bharti Enterprises that operates the Bharti Airtel brand in 17 countries across South Asia and Africa, said it has no intention of buying all of BT.

“This was an investment. We will not operate BT; we are backing their management and strategy,” Mittal said, while clarifying that the group would not buy any additional stake or take any seats on the board, and stressed that the stake purchase was a strategic move and financially attractive as European and UK telcos traded at low multiples.

“The Indian government is continuously encouraging a handful of companies that have gone global to accelerate the process. We operate in 16 countries already, and now, having the UK and starting a chapter on the European continent is the next step,” he added.

Israeli-French telecom billionaire Patrick Drahi, who owns Altice, also owns Sotheby’s auction house. Ahead of the deal, as part of regulatory process, Bharti had voluntarily sought clearance under the UK National Security and Investment Act.