Bharti Becomes BT’s Top Shareholder with $4B Stake

Bharti is set to become BT’s largest shareholder with a $4B stake, enhancing BT’s position and competitiveness in the evolving telecom market

Bharti, the Indian technology and telecommunications conglomerate that controls Airtel and other assets, has announced its intention to acquire a 24.5% stake held by Altice. The stake is valued at approximately $4 billion, based on BT’s market capitalization of approximately £13 billion ($16 billion) at the time of the transaction.

Bharti announced in a statement that it would acquire 9.99% of the shares immediately, with the remaining shares to be acquired upon regulatory clearance.

Altice has been placed in a precarious position due to its debt-driven acquisitions and corporate scandals, as described in this article from the conclusion 2023. In 2021 and May 2023, Altice, which also holds other technology and communications interests, acquired its stake in BT in multiple tranches. Since that time, the share price of BT has decreased, in part as a result of the general decline in technology and communications equities.

Altice appears to be in the process of divesting itself: This transaction follows the sale of Teads to Outbrain for approximately $725 million less than two weeks ago.

Currently, telecommunications companies are confronted with two of the most significant existential milestones: 5G and AI. How carriers manage their cards may determine whether they are opportunities or hazards. Bharti likely sought to achieve better economies of scale in purchasing, development, and strategy by citing both in its rationale for this deal.

This was in response to a strong competitive approach from technology giants, threatening to further cannibalize telecommunications companies with new communication approaches that bypass telco infrastructure.

“Bharti anticipates that this investment will facilitate the development of new synergies in the telecommunications sector between the two countries, including AI, 5G R&D, and core engineering, among other areas. This investment offers significant potential for collaboration on industry best practices and emerging technologies,” the company stated.

Airtel, Bharti’s mobile carrier, fiercely competes with Jio in India, which many regard as a duopoly. Consequently, Bharti’s investment in foreign markets provides it with enhanced diversification.

It is intriguing that BT, riding high on its incumbency status in the U.K. when telecommunications was the dominant industry, was once the one investing: it held a 21% stake in Bharti between 1997 and 2001.

Sunil Bharti Mittal stated, “Bharti and British Telecom (BT) have an enduring relationship that goes back more than two decades.” BT owned a 21% stake and two board seats in Bharti Airtel Limited from 1997 to 2001. “Today is a significant milestone in the history of Bharti Group as we invest in BT, an iconic British company.”

BT communicated the news of the transaction in a significantly more concise manner.

In a statement, BT’s CTO, Allison Kirkby, stated, “We are pleased to welcome investors who acknowledge the long-term value of our business. The substantial investment from Bharti Global is a significant endorsement of our strategy and the future of BT Group.” This was the company’s sole statement regarding the transaction.

“I am delighted that BT has maintained a long-standing partnership with Bharti Enterprises, and I am grateful that they are committed to our business’s future aspirations and vision.” They have a proven track record of success in the industry, and I anticipate continued and constructive interaction with them in the years ahead.