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Tatas to merge telecom business with Bharti Airtel

Friday, October 13, 2017

Tata Teleservices will merge with Bharti Airtel as the Tata group firm looks to tide over its financial woes by exiting the mobile telephony business. The companies said the deal is on a no-debt, no-cash basis, implying Airtel is not taking over any of the about Rs 40,000 crore debt with Tata Teleservices and is neither paying any cash.

Even 70-80% of the Rs 9,000-10,000 crore deferred payments for spectrum that TTSL holds, will be paid by Tatas. The deal, subject to regulatory approvals, will see over 40 million customers of Tata Teleservices (TTSL) and Tata Teleservices Maharashtra (TTML) joining Bharti Airtel and mark further consolidation in one of the world's largest telecom markets.

The merger will be on a debt-free, cash-free basis and all past liabilities and dues to be settled by Tata, the companies said in a statement. "This is a significant development towards further consolidation in the Indian mobile industry... The acquisition of additional spectrum made an attractive business proposition," Bharti Airtel Chairman Sunil Bharti Mittal said.

The transaction will create substantial long-term value for shareholders given the significant synergies, he said. Tata Sons Chairman N Chandrasekaran said the agreement is the "best and most optimal solution" for the Tata Group and its stakeholders. "We have evaluated multiple options and are pleased to have this agreement with Bharti," he added.

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