Boston-based American Tower Corporation (ATC) said it is buying 100% stake in Essar Telecom Infrastructure Private Ltd (ETIPL) through its indirect wholly-owned Indian subsidiary Transcend Infrastructure Ltd (TIL) for Rs 2,000 crore. This would be an all-cash deal. ETIPL has about 4,450 wireless communications tower sites, including a number of towers under construction across 12 of the 22 telecom circles in India, with a tenancy ratio of 1.8x.
In a media release, the firm said that TIL had entered into a definitive share purchase agreement with three Indian companies of the Essar Group to acquire substantially the entire issued share capital of ETIPL. However, it refused to give details on these group companies.
The Indian tower industry is witnessing a phase of consolidation, with firms trying to leverage assets as growth slows and competition intensifies in the market. GTL Infrastructure, India?s largest independent operator of mobile-phone towers, last month agreed to buy 17,500 transmission sites from mobile operator Aircel for Rs 8,400 crore to help it double its network in India.
For American Tower, this is the third acquisition in India in less than 12 months as it aims to drive international growth in emerging markets, including India.
The ETIPL transaction is subject to certain pre-completion requirements and is expected to be completed in approximately three months, the firm said.
Meanwhile, Essar Securities, in a filing to the Bombay Stock Exchange, said its board of directors has approved to sell its investments comprising equity shares of ETIL for Rs 49 crore to TIL.
Amit Sharma, executive vice-president and president, Asia, of American Tower, said, ?The addition of ETIPL to American Tower?s existing Indian operations will significantly strengthen our ability to serve our telecom customers; this will help them in enhancing their network coverage and in launching new technologies like 3G and WIMAX.?
Vikash Saraf, director, strategy and M&A, Essar Group, said, ?Going forward, the company under the aegis of ATC, can look forward to significant growth and consolidating its position in this space.?
American Tower is already profitable in emerging markets in terms of earnings before interest, taxes, depreciation and amortisation, chief financial officer Tom Bartlett said on a conference call in December.
The second-largest US operator of mobile-phone towers, based in Boston, bought Xcel Telecom Pvt in May and Transcend Infrastructure in October, taking its total number of towers in the South Asian nation to about 2,500.
American Tower is an independent owner and operator of wireless and broadcast communication sites. The company?s global portfolio includes 28,000 sites and is experiencing steady growth, according to its website.
In addition to leasing space on towers, the company provides customised collocation solutions through its distributed antenna systems (DAS) that support seamless in-building and outdoor wireless coverage.
