Warburg Pincus to acquire 20% stake in Airtel’s DTH arm for $350 mn

Global private equity major Warburg Pincus will acquire up to 20 per cent equity in Bharti Telemedia, the direct-to-home (DTH) arm of Bharti Airtel, for about $350 million. The acquisition will be executed through an affiliate of Warburg Pincus.

Of the total 20 per cent, 15 per cent will be sold by Bharti Airtel and the balance by another Bharti entity. Upon closing of the transaction, Airtel will own 80-per cent equity stake in Bharti Telemedia, the company said in a statement.

''Airtel has enjoyed a very successful partnership with Warburg Pincus in the past and we are excited to partner with them once again in an attractive and fast growing space. Airtel TV is very well positioned in the DTH space, and we are committed to grow our share of the market through a combination of innovation, value engineering, customer service and distribution initiatives,'' said Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel.

Bharti Telemedia is a DTH service provider in India, offering services under the Airtel TV brand. It had about 14 million subscribers and $550 million in revenues during the 12-month period ended September 30, 2017.

Airtel TV, which was launched in 2008, has grown to become a top three in-home entertainment player with industry leading profitability. The company has a strong distribution infrastructure, with over 1,500 partners and over 158,000 recharge outlets in about 630 districts of the country.

''The Indian Digital TV market is expanding rapidly and we believe that Airtel DTH is well positioned to capitalise on incremental growth in digitization and new TV penetration in Tier 3 and 4 towns and rural areas. We are pleased to be working alongside Sunil Bharti Mittal and the Bharti group again following our successful partnership many years ago, and we look forward to supporting the management team during the next phase of the company's growth,'' Vishal Mahadevia, managing director and co-head, Warburg Pincus India, said.

The Airtel board has approved the transaction, which is subject to regulatory approvals. As part of the transaction, Viraj Sawhney, managing director, Warburg Pincus India, will join the board of Bharti Telemedia.