Bharti Enterprises acquires 24.5% stake in UK's British Telecom

London, UK - Indian conglomerate Bharti Enterprises, led by billionaire Sunil Bharti Mittal, is set to become the largest shareholder in British Telecom Group Plc (BT), following an agreement to acquire a 24.5% stake from Patrick Drahi’s Altice UK. The deal, which positions Bharti as a key strategic player in one of the UK’s most significant telecommunications companies, is seen as a major vote of confidence in BT’s future.

Bharti Televentures UK Ltd, a wholly-owned subsidiary of Bharti’s international investment arm, Bharti Global, will initially acquire a 9.99% stake in BT, with plans to purchase the remaining 14.51% contingent on regulatory approvals. While the companies have not disclosed the exact value of the transaction, estimates suggest the stake is worth approximately £3.2 billion, based on the most recent closing price on the London Stock Exchange.

Strategic Expansion Amidst Altice’s Debt Struggles

This acquisition is part of Bharti’s broader strategy to expand its international footprint, particularly in markets with strong growth potential. Bharti, known for its telecom brand Bharti Airtel, which operates in 17 countries across South Asia and Africa, sees the investment as a long-term commitment to BT’s growth and transformation. 

For Altice, the sale represents a critical step in addressing its significant debt burden, which has reached an estimated $60 billion. Drahi’s telecom empire, which has faced mounting financial pressures due to rising interest rates and corruption investigations, has been shedding assets to stabilize its financial position. The sale to Bharti is expected to provide Altice with much-needed liquidity, allowing the company to focus on its core operations.

Market Reactions and Government Scrutiny

BT’s shares surged by 8.5% following the announcement, closing at 141.50 pence on the FTSE 100. The market’s positive reaction underscores the confidence investors have in Bharti’s involvement, particularly as BT’s new CEO, Allison Kirkby, seeks to revitalize the company through a strategy focused on higher profits and enhanced operational efficiency.

Despite Bharti’s growing influence, the Indian conglomerate has made it clear that it has no intention of pursuing a full takeover of BT. The company’s statement to the London Stock Exchange emphasized its support for BT’s current management and its “ambitious” plans to deliver long-term sustainable growth.

The acquisition, however, may draw attention from the UK government, particularly under the National Security and Investment Act, which grants authorities oversight over foreign investments in critical infrastructure. Bharti’s purchase will likely be closely monitored, given BT’s role in the UK’s national communications infrastructure.

A Historical Partnership Reignited

The deal marks a significant milestone in the relationship between Bharti and BT, which dates back more than two decades. From 1997 to 2001, BT held a 21% stake in Bharti Airtel and had two representatives on the board of the Indian telecom giant. This historical connection, coupled with Bharti’s robust track record in the telecom sector, adds a layer of strategic depth to the investment.

Sunil Bharti Mittal, in a statement, expressed confidence in BT’s future, citing the company’s strong portfolio of market-leading brands, high-quality assets, and experienced management team. “This investment demonstrates the confidence we have in BT and in the UK. BT is playing a vital role in expanding access to full-fibre broadband infrastructure across the UK, and we fully support their vision for the future,” Mittal said.

BT’s CEO, Allison Kirkby, welcomed the investment, calling it “a great vote of confidence in the future of BT Group and our strategy.” She highlighted Bharti’s long-standing success in the telecom sector and expressed optimism about the positive engagement between the two companies moving forward.

Implications for the Telecom Industry

The acquisition is likely to have broader implications for the telecom industry, particularly in the context of global consolidation and the strategic importance of telecommunications infrastructure. Analysts have noted that Bharti’s investment could pave the way for increased collaboration between the UK and India in emerging technologies such as artificial intelligence, 5G, and core engineering.

As Bharti solidifies its position as a major shareholder in BT, the move is also seen as a reflection of the shifting dynamics in the telecom sector, where companies are increasingly looking to international partnerships to drive growth and innovation. The UK-India Technology Security Initiative, announced during a recent visit by UK Foreign Secretary David Lammy to India, is expected to further enhance collaboration between the two countries in critical and emerging technologies.

Bharti’s acquisition of a 24.5% stake in BT from Altice is a strategic move that underscores the Indian conglomerate’s commitment to long-term growth in the telecom sector. As BT navigates its path forward under new leadership, the partnership with Bharti could prove to be a pivotal moment in the company’s history, with significant implications for both the UK and global telecommunications landscape.