Bharti Enterprises Acquires Major Stake in BT: All You Need To Know
India’s Bharti Enterprises, led by billionaire Sunil Bharti Mittal, announced it would acquire a 24.5% stake in British telecom giant BT Group, valued at £3.2 billion ($4 billion). This move involves buying out Patrick Drahi, the top investor in BT, as his Altice group accelerates asset sales to reduce its $60 billion debt.
This strategic acquisition positions Bharti as a significant shareholder in BT, the UK’s largest broadband and mobile company. BT’s new CEO, Allison Kirkby, is focused on reviving the company’s performance by promising higher profits after years of cost-cutting.
Bharti, known for its Bharti Airtel brand, which operates in 17 countries across South Asia and Africa, clarified that it has no plans to acquire all of BT. The company supported BT’s executive team and its ambitious plan to build the UK’s fiber network to drive long-term sustainable growth.
Background on Patrick Drahi and the Deal
Patrick Drahi, a Franco-Israeli billionaire, initially acquired his 24.5% stake in BT for about £4.2 billion between 2021 and 2023. Drahi built his wealth through debt-fueled acquisitions in the telecom and cable industries. However, his Altice group has been under pressure due to its heavy debt load, leading to the sale of this significant stake in BT.
The deal news increased BT’s shares by 6% in early trading. Bharti has already purchased a 9.99% stake in BT and is awaiting the UK government’s national security clearance before acquiring the remaining 14.51%.
Speaking to reporters, Mittal expressed unwavering confidence in BT’s future and urged the company to pursue its strategy more boldly. He emphasized that Bharti is a long-term investor and is not swayed by short-term market fluctuations, instilling a sense of stability and security in the audience.
“I want Indian companies to become multinational. They should have their arms elsewhere too” – PM @NarendraModi ji
With Bharti Enterprises entering into a binding agreement to acquire a 24.5 % strategic stake in the UK’s BT Group, the wheel has come full circle since 1997 when…
— Piyush Goyal (@PiyushGoyal) August 12, 2024
Bharti’s Strategic Move
Bharti’s investment in BT is seen as a vote of confidence in the UK’s stable business and policy environment, especially under the new Labour government. This acquisition also highlights the long-standing relationship between Bharti and BT, dating back to when BT owned a 21% stake in Bharti Airtel from 1997 to 2001.
Although Bharti has not asked for a seat on BT’s board, Mittal mentioned his ideas for the management team. This deal is one of the most significant overseas acquisitions by an Indian company and places Bharti alongside other major Indian conglomerates that have invested in British companies.
Indian Conglomerates in the UK
Bharti’s acquisition of BT follows a trend of Indian companies investing in the UK. Here’s a look at some other notable Indian corporate investments in British firms:
- Tata Group: One of India’s oldest business groups, Tata acquired several major British firms, including Tetley Tea, Jaguar Land Rover, and Corus Group, now Tata Steel Europe. Recently, Tata announced a $5.1 billion investment in a UK electric car battery factory.
- Reliance Industries: Led by Mukesh Ambani, Reliance acquired British battery technology company Faradion Ltd for $135 million in 2021, and in 2019, it bought the iconic toy store chain Hamleys for $88.5 million.
- Wipro: The Indian tech giant acquired UK-based management consultancy firm Capco in a $1.45 billion deal in 2022.
- Eicher Motors: Eicher acquired the iconic British motorcycle brand Royal Enfield, bringing it back to life after nearly 50 years.
- Mahindra & Mahindra: Acquired BSA Motorcycles in 2021, relaunching the brand with the Gold Star 650.
- TVS Motor Company: Purchased the British brand Norton in 2020 and acquired a 70% stake in EBCO Ltd to produce and distribute electric bikes in Britain.
- Wadhawan Global Capital: Led a £32 million fundraising effort for the British digital bank Zopa in 2017.
Research by Grant Thornton found that there are 971 Indian-owned firms in the UK in 2024, with a significant presence in various sectors, including pharmaceuticals, hospitality, and decarbonization efforts. Major Indian pharmaceutical companies like Dr. Reddy’s, Cipla, and Glenmark have operations in the UK, supplying generic medicines to the NHS.
Bharti’s investment in BT is a testament to the growing influence of Indian conglomerates in the UK, following in the successful footsteps of companies like Tata, Reliance, and Mahindra. These success stories inspire hope and confidence in the potential of Indian investments in the UK.