More Tower Mergers for India Reported
India's GTL Infrastructure and the Essar Group have reportedly agreed to merge their telecom tower businesses - in a transaction that could be worth at least $2 billion. People close to the transaction told the Economic Times that GTL Infrastructure, which owns about 6,000 towers, will buy Essar’s business in exchange for a mixture of shares and cash.
Essar is expected to end up with around 20% of the new company, which will have around 20,000 base stations when its current rollout is completed by the middle of this year. A further 5,000 base stations are expected to be added by 2011.
“We believe that consolidation is necessary in this industry. We are in discussions with several companies for consolidation and merger. However, no transaction has been finalised yet,” Essar Telecom CEO Ajay Madan told the newspaper.
GTL Infrastructure issued a statement to the Bombay Stock Exchange: "The company has also not entered into any definitive agreement for purchasing any tower assets or merging itself with any one else. As a part of the strategy, the company apart from rolling out a pan-India network of towers is also in discussion with various players in the industry for inorganic growth,"
There have been other reports suggesting that GTL is only one of several companies that Essar Group is talking to. Srei Group's Quippo Infrastructure Equipment and privately-held Asper have also been cited as possible suitors.
On the web: Economic Times
Posted to the site on 9th April 2008
