Bharti Airtel on Wednesday said that it will acquire Warburg Pincus affiliate's 20 per cent equity stake in its DTH arm Bharti Telemedia.
The deal involves a total consideration of Rs 3,126 crore which will be discharged primarily via issuance of 3.64 crore equity shares of Airtel at a price of Rs 600 per share, and up to Rs 1,037.8 crore in cash, Bharti Airtel said in a regulatory filing.
The issuance of shares proposed through preferential allotment is subject to shareholders' approval.
"The proposed transaction is part of Airtel's strategy to align the shareholding of its customer facing products, services and businesses under the same holding group," it said.
A full control and ownership over Bharti Telemedia allows Airtel to offer differentiated and converged solutions to customers so as to promote "One Home" strategy.
Harjeet Kohli, Group Director, Bharti Enterprises said: "DTH is an integral part of our Homes strategy and this transaction is another step towards simplifying the shareholding of our customer facing businesses providing structural flexibility and ease of implementation."
He added that Airtel has always enjoyed a close and strategic partnership with Warburg Pincus, across its business verticals and geographies and were delighted to have them back as part of Airtel's exciting journey ahead, including in digital businesses.
Airtel will issue its shares to the Warburg Pincus affiliate at a premium of 0.50 per cent to the floor price determined as per ICDR regulations.
The remaining consideration of Rs 937.8 crore shall be paid in cash on the closing date of the proposed transaction. There may also be minor customary closing adjustments not exceeding Rs 100 crore.
Vishal Mahadevia, Managing Director and Head of Warburg Pincus India, said: "Airtel was one of the earliest and most profitable investments for Warburg Pincus in India. We are delighted to be back as partners in Bharti Airtel through this transaction."
"We look forward to capitalising on the broad-based growth that the company is witnessing across its entire portfolio of businesses, including the digital build-outs," he said.
In December 2017, a Warburg Pincus affiliate agreed to acquire 20 per cent equity stake in Bharti Telemedia, the DTH arm of Airtel.