American Tower to acquire tower assets of Vodafone, Idea Cellular for Rs 7,850 crore

NEW DELHI:American Tower Corp said that it will  acquire tower assets of Vodafone India and Idea Cellular for Rs. 7,850 crore. The two operators have about 20,000 towers.

"American Tower Corporation (NYSE:AMT) today announced that ATC Telecom Infrastructure Private Limited (“ATC TIPL”, formerly Viom), its majority owned Indian subsidiary, has entered into definitive agreements with Vodafone India Limited (“Vodafone”) and Idea Cellular Limited (“Idea”) through which it will add an aggregate of approximately 20,000 communications sites to its existing Indian portfolio," the company said in a statement..

“We are extremely pleased to partner with Vodafone and Idea to help expand mobile broadband services across India while furthering our participation in the Digital India initiative.”

As part of the transactions, ATC TIPL, Vodafone and Idea have established a preferred partner structure under which Vodafone and Idea, given their expanded relationship with ATC TIPL, will receive service level and process efficiency benefits and ATC TIPL will secure certain preferential rights for future new business commencements on its existing portfolio and on the sites being acquired in certain Indian markets. The aggregate cash consideration for the transactions is expected to be INR 78.5 billion, or approximately $1.2 billion at current exchange rates, subject to customary closing adjustments.

Jim Taiclet, American Tower’s Chief Executive Officer stated, “We expect the addition of these two high quality portfolios to be highly complementary to our existing assets and to contribute to long-term leasing growth as India’s leading mobile operators accelerate their 4G network deployments.”

Amit Sharma, American Tower’s EVP and President, Asia and Chairman of the Board, ATC TIPL, added, “We are extremely pleased to partner with Vodafone and Idea to help expand mobile broadband services across India while furthering our participation in the Digital India initiative.”

The transactions are expected to generate approximately Rs 21 billion (approximately $320 million) in property revenue and approximately INR 8 billion (approximately $120 million) in gross margin during their first full year in American Tower’s portfolio, at current exchange rates. Further, SG&A associated with the assets is expected to be less than INR 1 billion (approximately $10 million) for the first year. The transactions are expected to be immediately accretive to AFFO per share, are subject to customary closing conditions and regulatory approval and are expected to close in the first half of 2018.