American Tower is on the verge of agreeing a deal that will see it acquire a majority stake in Indian towers company Viom Networks, it emerged on Monday.
The telecom towers firm’s board is due to approve a takeover deal this week, barring any last-minute changes of plan," the Economic Times reported, citing various unnamed sources.
The deal will see current majority owner the Tata group reduce its holding, without completely exiting the venture, the paper said. As it stands, Tata Teleservices owns 54% of Viom, while finance group Srei holds 18.5%, with the remainder in the hands of various private equity firms.
Srei group and the PE firms are set to exit Viom, but Tata will retain up to 26%, the report said. By keeping a stake, Tata will maintain a preferential relationship with the company when it comes to tower leasing contracts.
One of the sources said that the deal values the Indian towers firm at around 190 billion rupees (€2.55 billion), including INR65 billion in debt.
Talks between the parties have been ongoing for a couple of years, but to date the firms have yet to reach agreement on price. Viom was reportedly holding out for a valuation of around INR250 billion, the paper said.
Srei confirmed to the Economic Times that work on the deal has progressed, but the other parties declined comment.
American Tower owns or operates in excess of 10,000 towers in India and has renewed its interest in the market following February’s spectrum auction, the paper explained.
Viom has around 41,000 towers with 1,000 under construction. It generates 40% of its revenue from Tata Teleservices, with the remainder coming from Uninor, Aircel and Vodafone.
Should American Tower succeed in taking majority ownership of Viom, the pair would merge their Indian businesses.
