American Tower Corporation (ATC) is finally set to own a controlling stake in Viom Networks in a deal that will value the Indian tower company at about ₹20,000 crore.
The deal is expected to be announced on Wednesday. ATC will acquire the stake from a clutch of existing investors, including Kolkata-based Srei Infrastructure. The Tata Group, which currently owns a 54 per cent stake in Viom, will stay invested as a minority partner.
The Boston-based telecom tower company has been eyeing this deal for more than a year, with negotiations almost breaking down in May. ATC has been in talks with Viom Networks since June last year but the negotiations got serious only in October.
The big point of difference was the valuation, with Viom’s promoters wanting to use Bharti Infratel as the benchmark. Srei Infrastructure had also looked at exiting Viom through an Initial Public Offering. With the talks going nowhere ATC had even initiated discussions with Reliance Communications to buy its tower assets via Reliance Infratel.
The deal with Viom will give ATC a significant foothold in the Indian market at a time when telecom operators are expanding networks to offer 3G and 4G services. It will be the American company’s biggest acquisition in India since it entered the country eight years ago. Viom, a joint venture between Srei Infrastructure and the Tata Group, has over 42,000 towers.
Previous buysRecently, ATC acquired the telecom tower assets of KEC International Ltd for ₹81 crore. In 2009, ATC had acquired 1,700 towers of Xcel Telecom, founded by former BPL Mobile CEO Sandip Basu, for an undisclosed amount.
In the same year, it announced the acquisition of 400 towers from Kolkata-based tower company Transcend Infrastructure for about ₹95 crore. The biggest deal, however, came in 201,0 when ATC acquired 4,630 towers from the Essar Group for about ₹2,000 crore. However, it has not been able to close any major deals in India as it has in other markets.
Recently, it bought nearly 11,300 towers from Verizon in the US for just over $5 billion.