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Telenor ASA — M&A Activity 2017
Feb 23, 2017
3773_iss_2017-02-23_7b0e1c55-82a3-441c-8336-2af4fa8c12d0.html
M&A Activity
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Bharti Airtel to take ownership of Telenor's operations in India
Bharti Airtel to take ownership of Telenor's operations in India
(Fornebu, Norway - 23 February 2017) - Telenor ASA has on 23
February 2017 entered into a definitive agreement with Bharti Airtel
Limited (Airtel), whereby Airtel will take full ownership of Telenor
India.
Airtel is India's largest wireless operator with over 269 million
subscribers and a revenue market share of over 33 per cent. As the
new owner, Airtel will take over Telenor India's spectrum, licenses
and operations, including its employees and customer base of 44
million. Telenor's operations and services will continue as normal
until the completion of the transaction.
"We believe today's agreement is in the best interest of our
customers, employees and Telenor Group. Finding a long term solution
to our India business has been a priority for us, and we are pleased
with our agreement with Airtel. The decision to exit India has not
been taken lightly. After thorough consideration, it is our view
that the significant investments needed to secure Telenor India's
future business on a standalone basis would not have given an
acceptable level of return," says Sigve Brekke, Chief Executive
Officer of Telenor Group.
Gopal Vittal, Managing Director and CEO (India and South Asia),
Bharti Airtel, says, "The agreement underlines our commitment to
lead India's digital revolution by offering world-class and
affordable telecom services through a robust spectrum portfolio
spread across multiple bands. On completion, the proposed
acquisition will undergo seamless integration, both on the customer
as well as the network side, and further strengthen our market
position considerably in several key circles. The customers of
Telenor India will be able to enjoy India's widest and fastest voice
& data network, and a range of Airtel's world-class products and
services."
The transaction will not trigger any impairment. As of fourth
quarter 2016, the remaining value of tangible and intangible assets
in Telenor India amounted to NOK 0.3 billion.
According to the agreement, Airtel and Telenor India will merge and
Airtel will take over Telenor India as soon as all necessary
approvals are received. As part of the agreement, Airtel will take
over outstanding spectrum payments and other operational contracts,
including tower lease.
The transaction is subject to requisite regulatory approvals,
including approvals from the Department of Telecommunications in
India (DoT) and the Competition Commission of India. The exposure to
claims related to the period Telenor owned the business, will remain
with Telenor.
The transaction is expected to close within 12 months. With effect
from first quarter 2017, Telenor India will be treated as an asset
held for sale and discontinued operations in Telenor Group's
financial reporting.
Telenor announced its entry into India in 2008. In 2016, Telenor
India's revenues were NOK 6.0 billion and the operating cash flow
was NOK -0.4 billion. Telenor services are commercially available in
six telecom circles in India (Andhra Pradesh, Bihar & Jharkhand,
Gujarat, Maharashtra, UP East and UP West), and the company also has
spectrum in Assam.
Investor contacts
Helge Øien, Mobile: (+47) 9131 9242, [email protected]
Marianne Moe, Mobile: (+47) 9161 7631, [email protected]
Media contacts
Meera Bhatia, Mobile: (+47) 4684 4959, [email protected]
Glenn Mandelid, Mobile: (+47) 9266 1300, [email protected]