The deal will not affect the merger terms of the two companies.
New Delhi: Telecom operators Idea Cellular and Vodafone, who are currently in the process of merging their mobile business in India, decided to sell their tower business to wireless and broadcast communications infrastructure firm American Tower Corporation (ATC) for $1.2 billion, a statement said.
The deal, expected to be completed by the first half of 2018, would give ATC an additional 20,000 towers and would raise its global towers tally to 1,70,000. “We expect the addition of these two high quality portfolios to be highly complementary to our existing assets and to contribute to long-term leasing growth as India’s leading mobile operators accelerate their 4G network deployments,” said American Tower’s CEO, Jim Taiclet.
Having seen off competition from Brookfield Asset Management Inc, ATC expects the transactions to generate around $320 million in property revenue and $120 million in gross margin during their first full year.
The transaction follows the merger announcement of March 20 where the firms had announced the intention to sell their individual standalone tower businesses to strengthen the balance sheet of the merged entity.
“In the event that the completion of the sale of the standalone tower businesses precedes the completion of the proposed merger of Vodafone India and Idea, Vodafone India will receive Rs 38.5 billion and Idea will receive Rs 40 billion,” said these firms.
The deal will not affect the merger terms of the two companies. “The receipt of these proceeds prior to completion was anticipated and provided for in the merger agreement and hence would not affect the agreed terms of the Vodafone India and Idea merger, including the amount of debt which Vodafone will contribute to the combined company at completion,” it added.