American Tower to Buy 51% of India's Viom in $1.2 Billion Deal

  • Tata Teleservices, Srei Infra and others to sell stakes
  • Boston company to merge its Indian operations with Viom

American Tower Corp. agreed to buy 51 percent of India’s Viom Networks Ltd. for 76 billion rupees ($1.2 billion) in a cash deal that may help the Boston-based company expand in the world’s second-largest wireless market.

ATC will eventually merge its Indian operations with Viom, according to a statement from the U.S. company. The sellers include Tata Teleservices Ltd. and Srei Infrastructure Finance Ltd., according to the statement. Tata will still retain some of its holdings after the transaction, while Srei and its founders will get 29.52 billion rupees from the sale of their entire stake and a non-compete agreement with ATC.

“With a population of nearly 1.3 billion people, rapidly growing smartphone penetration and limited fixed-line infrastructure, India’s vibrant wireless industry is poised for a sustained period of network investment,” American Tower’s Chief Executive Officer Jim Taiclet said in the statement.

The acquisition of the Indian firm will help ATC more than quadruple its towers in India to 56,000 and position itself for growth in a market of more than 900 million subscribers as Indians demand videos and games on their mobile devices. After completing a $5 billion deal earlier this year to purchase Verizon Communications Inc.’s U.S. towers, Taiclet is looking abroad for opportunities.

Reliance Communications

American Tower has about 14,000 towers in India, while Viom has 42,200 towers, according to the statement. Viom has about 58 billion rupees of debt, outstanding, according to the statement.

Under the agreement, ATC may be required to acquire all or a part of the remaining 49 percent of Viom, according to the statement.

The sale will also help Tata Teleservices, which had reported a net loss of 38.46 billion rupees for the year ended March, according to CARE Ratings Ltd.

Reliance Communications Ltd., controlled by Indian billionaire Anil Ambani, is also looking to sell its towers business. Ambani told shareholders last month that he expects to sell the assets in the next two months. He didn’t elaborate.

In an interview at Bloomberg headquarters in New York, Taiclet had declined to comment whether ATC was interested in Reliance Communications’ towers, but said the conditions are right to expand in the South Asian country.

Evercore Partners Inc. and Kotak Investment Banking are the financial advisors of American Tower, while its legal advisors are Clifford Chance, AZB & Partners and Luthra & Luthra. Credit Suisse Group AG was the financial advisor to Viom and its shareholders while Cyril Amarchand Mangaldas served as legal advisor.

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