RCom - GTL merger deal falls apart
06 Sep 2010
Reliance Communications Ltd, run by the Anil Dhirubhai Ambani Group, has ended talks to sell its telecom towers to GTL Infrastructure Ltd after both sides failed to agree on a deal to create the world's largest independent telecom infrastructure company.
A non-binding agreement in June expired on 31 August and neither side is extending the deadline, GTL said in a filing with the Bombay Stock Exchange today. Reliance has begun discussions with other potential investors and is also considering an initial public offering of the tower unit, called Reliance Infratel, it said in an e-mailed statement, without going into specifics.
A purchase would have more than doubled GTL's number of transmission towers and created a company with an estimated value of Rs50,000 crore ($11 billion).
GTL agreed to buy about 50,000 transmission towers from Reliance in exchange for cash and stock, the companies said in June. (See: GTL Infra, Reliance Communications in $11-billion tower business merger)
GTL declined to elaborate on today's statement.
A purchase would have increased GTL's number of transmission towers to about 80,000 from 33,000. GTL in January bought 17,500 towers from Aircel Ltd for Rs8,030 crore.