In the largest ever telecom takeover by an Indian firm, Bharti Airtel on Tuesday signed a deal with Kuwait-based Zain Telecom to buy its African business for USD 10.7 billion (about Rs 48,000 crore).
Announcing the deal, Sunil Mittal said, "This agreement is a landmark for global telecom industry and game changer for Bharti.
"More importantly, this transaction is pioneering step towards south-south co-opeation and strengthening of ties between India and Africa. With this acquisition, Bharti Airtel will be transformed into a truly global telecom company with operations across 18 countries, fulfilling our vision of building a world-class multinational."
The acquisition, the second largest by an Indian entity after Tatas' Corus deal, would make Sunil Mittal-led Bharti the world's seventh largest mobile operator with a total subscriber base of about 179 million. It would have estimated revenues of USD 13 billion.
With this, Bharti has fulfilled its ambition of entering Africa, where it failed twice in the last two year's to forge a USD 23 billion merger deal with South African telecom giant MTN.
Zain has operations in 17 African countries and Bharti has acquired all, but those in Sudan and Morocco.
The African business would widen Bharti's reach, which was hitherto restricted to Asia and Indian Ocean region with businesses in Sri Lanka, Bangladesh and Seychelles.
Of the USD 10.7 billion enterprise value of Zain, Bharti will be paying USD 8.3 billion upfront and USD 700 million after a year.
It would also take over approximately USD 1.7 billion of Zain's debts as on 31st December, 2009.
Of the USD 8.3 billion paid to Zain, Bharti has raised the debt from a consortium of foreign banks and State Bank of India with the lead-arranger and lead-advisor Standard Chartered Bank committing the highest amount USD 1.3 billion followed by USD 0.9 billion by Barclays.
The rest of the co-advisors ANZ, BNP, Bank of America-Merrill Lynch, Credit Agricole CIB, DBS, HSBC, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation have allocated USD 600 million each.
State Bank of India has agreed up to one billion dollar loan in rupee terms.