Reliance Communications has agreed to fold its tower business into Manoj Tirodkar’s GTL Infrastructure in a deal with an enterprise value of almost $11 billion, including debt.
GTL said Sunday its board had approved a 500 billion rupee ($10.9b) merger deal in-principle with Reliance Infratel to “create the world’s largest independent telecom infrastructure company.”
The agreement is one of India’s largest M&A deals, just shy of the $11.1 billion price tag Vodafone paid for Hutchison’s 67% stake in cellco Hutchison Essar (now Vodafone India) in 2007.
The new entity will account for more than 80,000 towers and over 125,000 tenancies from more than ten telecom operators, including RCom, Bharti Airtel, Vodafone, Idea Cellular and Aircel.
In addition, the merged company will have a “firm option of additional 75,000 tenancies from leading players,” said GTL.
Tirodkar’s Global Group will emerge with a 30%-33% stake in the new firm, with RCom boss Anil Ambani to own 24%-26%, saidBusiness Standard.
The remainder will be owned by GTL and RCom shareholders and possibly a new strategic partner, since GTL is reportedly seeking a financial investor to take 10%-12% of its one-third interest.
The deal will shave some $3.9 billion off RCom’s debt burden of $7.2 billion, since Reliance Infratel’s estimated debt of 180 billion rupee will be transferred to GTL.