© Reuters. A telecommunications tower managed by American Tower is seen in Golden, Colorado February 25, 2014. REUTERS/Rick Wilking/File Photo
(Reuters) -Canada’s Brookfield Asset Management (TSX:) will buy American Tower (NYSE:)’s loss-making Indian operations for $2.5 billion, it said on Friday, helping it overtake Indus Towers to become the country’s largest operator of telecom towers.
The deal, one of India’s largest-ever telecom infrastructure deals, will be Brookfield’s third such acquisition in its four years in the country and marks American Tower’s exit after 16 years.
American Tower has been considering selling its India operations for nearly a year due to the inability of its top client Vodafone (NASDAQ:) Idea to clear dues and recently took a roughly $322 million writedown on the value of the business.
American Tower said it will continue to hold Vodafone Idea’s optionally convertible debentures and will be entitled to receive its dues.
Brookfield operates around 157,000 telecom towers in India via its associate Data Infrastructure Trust, while American Tower operates some 77,000 towers.
Indus has roughly 193,000 towers. Vodafone Idea has a stake of about 3% in Indus, while Bharti Airtel, one of India’s top telecom companies, has a roughly 48% stake.
The tower companies are all vying for business from India’s top three telcos. But while Airtel and Reliance Industries’ Jio have been growing, Vodafone Idea is struggling operationally and financially.
“The acquired sites are expected to diversify DIT’s (Data Infrastructure Trust) revenues and increase touch points with all mobile network operators in India,” Brookfield said in a statement.
Brookfield entered India in 2019 by buying some 130,000 towers from Reliance and it acquired a portfolio of another 5,000 towers in 2022.
Data Infrastructure reported revenue of 111 billion rupees ($1.33 billion) in the fiscal year ended March 2023, compared to Indus Towers’ 283.8 billion rupees.
The transaction is expected to be close in the second half of 2024.
Indus Towers’ shares rose 2.5%, while Bharti Airtel’s shares were little changed. ($1 = 83.2150 Indian rupees)