American Tower sells its India business to Canada’s Brookfield in a $2.5 bn deal

American Tower Corp (ATC) has agreed to sell its India operations to Canadian buyout firm Brookfield in a deal worth around Rs21,000 crore ($2.5 billion) in total.

As per the agreement signed on Friday, Data Infrastructure Trust (DIT), an Infrastructure Investment Trust sponsored by an affiliate of Brookfield Asset Management, will acquire the tower assets of ATC in India at an enterprise value of Rs16,500 crore ($2 billion). 

ATC said the total cash proceeds from the transaction, subject to certain pre-closing terms, would be around Rs21,000 crore ($2.5 billion).

"Total cash proceeds include an enterprise value on ATC India operations of approximately $2 billion, plus a ticking fee that accrues from 1 October 2023, to the date of closing," the release said.

"Data Infrastructure Trust (DIT), an Infrastructure Investment Trust sponsored by an affiliate of Brookfield Asset Management , today announced the signing of an agreement with ATC to acquire 100 per cent of the equity interests in American Tower's operations in India (ATC India), for an enterprise value of Rs16,500 crore ($2 billion) which is subject to pre-closing terms as per the securities purchase agreement," a release by DIT said.

The transaction value includes the repayment of existing intercompany debt and the repayment, or assumption, of the existing India term loan, by DIT.

"Furthermore, and considered within the total potential cash proceeds above, American Tower will retain the full economic benefit associated with the optionally converted debentures (OCDs) issued by Vodafone Idea and will be entitled to receive future payments related to existing ATC India receivables. Proceeds from the transaction are expected to be used to repay American Tower's existing indebtedness," ATC said.

DIT, which houses Brookfield's telecom tower businesses in India through Summit Digitel and Crest Digitel, will also include ATC on completion of the transaction.

This will be Brookfield's third acquisition of telecommunication infrastructure business in India. Brookfield had, in 2022, acquired 5,000 indoor business solution sites and small cell sites meant for the rollout and expansion of 5G network.

Earlier, in 2020, it had acquired nearly 1,75,000 towers from Reliance Industrial Investments and Holdings Ltd.

The transaction is subject to regulatory approvals and is expected to close in the second half of this year, ATC said.