British American Tobacco (BAT) announced on Tuesday its intention to sell approximately 2.3% of its stake in Indian consumer goods giant ITC through a block trade. Despite the planned sale, BAT will remain ITC’s largest shareholder, retaining a 23.1% stake in the company. The move comes as part of BAT’s broader strategy to streamline its holdings and return value to shareholders.
As a result of the proposed deal, BAT said it would increase its 2025 share buyback programme by £200 million, bringing the total to £1.3 billion ($1.74 billion). The company clarified that the deal is not expected to impact its annual financial outlook. BAT had previously forecast a modest 1% annual revenue growth, citing tax-related headwinds in markets such as Bangladesh and Australia.
According to a term sheet reviewed by Reuters, BAT is offering up to 290 million ITC shares at a floor price of Rs 400, representing a 7.8% discount to ITC’s closing price on Monday. The deal will be led by Goldman Sachs and Citigroup. The company did not disclose further details and emphasized there is no certainty the transaction will proceed.
This marks BAT’s second major offloading of ITC shares within a year. In 2023, the tobacco firm sold 436.9 million shares—roughly 3.5% of ITC’s outstanding stock—for about $2 billion, ranking as India’s third-largest block trade to date.
BAT’s proposed stake sale is the second significant block trade in India this week. Just days earlier, Rakesh Gangwal, co-founder of IndiGo, sold a 5.7% stake in the airline for $1.36 billion.
BAT, known for cigarette brands such as Dunhill and Lucky Strike, appears to be actively reshaping its portfolio while maintaining a strong position in ITC. The company continues to adapt to evolving regulatory and market challenges while pursuing strategies aimed at enhancing shareholder returns.