Bharti Infratel to merge with Indus Towers

India’s Bharti Airtel has approved a plan to merge its infrastructure unit Bharti Infratel with Indus Towers to create a listed pan-India tower company.

The combined company will fully own the respective business of Bharti Infratel and Indus Towers, and will own over 163,000 towers across all 22 of India’s telecom circles, making it the largest tower company in the world outside of China. It will change its name to Indus Towers Limited.

Bharti Airtel already owns a 42% stake in Indus Towers, with Vodafone Group owning another 42%, Idea Group owning 11.15% and Providence Equity Partners owning the remaining 4.85%.

Post-merger, Vodafone will be issued 783.1 million new shares in the combined company, while Idea Group will be given the option of selling its shares in the company or taking shares based on the merger ratio, and Providence will be given the option of selling most of its holdings.

Assuming Idea and Providence take up the option of selling their shares for cash, Airtel’s shareholding in the combined company will be diluted to 37.2% and Vodafone’s shareholding would be diluted to 29.4%.

The combined company is expected to have an enterprise value of around $10.8 billion, Airtel said in a statement.

Based on this expected valuation, Idea stands to gain around $1 billion from the sale of its shares. Vodafone’s holding in the combined company would meanwhile be worth around $4.3 billion.

The merger is expected to be complete in the current financial year, which ends in March 2019.