Canadian company, Brookfield, is set to acquire the Indian business of the American Tower Corporation, in a deal worth $2.5 billion, including an enterprise value of $2 billion on ATC India, with a ‘ticking fee’ accruing from October 1, 2023.
The deal remains subject to regulatory approvals and is anticipated to close in the second half of 2024, announced Data Infrastructure Trust (DIT) in a press release. DIT is an infrastructure investment trust sponsored by an affiliate of Brookfield Asset Management. The Trust announced on Friday that an agreement has been signed with ATC to acquire a 100 per cent stake in ATC India, for an enterprise value of Rs 16,500 crore, subject to pre-closing terms, according to the securities purchase agreement, reported PTI.
Notably, ATC India holds a portfolio of nearly 78,000 sites spread across India. The total cash proceeds to ATC at closing, subject to specific per-closing terms, would potentially come around Rs 21,000 crore approx or $2.5 billion, based on the current exchange rates, a release by ATC revealed.
The overall cash proceeds comprise an enterprise value on ATC India operations worth $2 billion, and a ticking fee accruing from October 1, 2023, to the date of closing, the release confirmed.
Proceeds related to the enterprise value assume the repayment of existing intercompany debt and the repayment, or assumption, of the existing India term loan, by DIT.
Within the overall potential cash proceeds above, American Tower would retain the full economic benefit associated with the optionally converted debentures (OCDs) issued by Vodafone Idea and would remain entitled to receive future payments regarding the existing ATC India receivables, the company informed.
The proceeds from the transaction are anticipated to be utilised towards repayment of American Tower’s existing indebtedness, ATC said. This deal will mark Brookfield’s third acquisition in the Indian telecommunications sector.
In 2022, Brookfield acquired a portfolio of 5,000 indoor business solutions sites and small cell sites, it said via the release. The acquisitions advanced the rollout of 5G and allowed telecom operators to increase their coverage capacity in remote and difficult locations.
Brookfield also possesses a portfolio of about 1,75,000 towers, acquired in 2020 from Reliance Industrial Investments and Holdings Ltd. ATC India will be included in DIT, which holds the existing telecommunication assets.
Commenting on the deal, Arpit Agrawal, managing director, head of infrastructure, India and Middle East, Brookfield, said, “We look forward to expanding and enhancing our existing telecom tower portfolio in India, which enables a broader array of solutions for our customers and partners. Through strategic acquisitions like ATC India, we remain deeply committed to empowering digital connectivity and transforming the telecom infrastructure landscape across the region.”
Brookfield posses nearly $25 billion worth assets under management across infrastructure, real estate, renewable power and transition, and private equity in India.