Airtel-Tata merger on cards: Bharti Airtel in talks with Tata Group to combine DTH biz of Bharti Telemedia, Tata Play

Airtel-Tata merger: Bharti Airtel confirmed on Wednesday, February 26, that it is currently in discussions with the Tata Group to explore a deal to merge Tata Play's direct-to-home (DTH) business with its subsidiary Bharti Telemedia Ltd. Sunil Mittal-led telecom operator announced in a regulatory filing to the stock exchanges today after certain reports indicated yesterday that the upcoming DTH deal would likely be through a merger swap.

“We wish to submit that Bharti Airtel Ltd and TATA Group are in bilateral discussions to explore a potential transaction to achieve a combination of TATA Group’s Direct To Home (‘DTH’) business housed under Tata Play Limited, with Bharti Telemedia Ltd, a subsidiary of Airtel, in a structure acceptable to all parties. The above is at a discussion stage only,” said Bharti Airtel in a regulatory filing to the stock exchanges on Wednesday evening.

Also Read: Tata Play net loss narrows to ₹35.38 crore in FY24 after boosting streaming business

Airtel-Tata Merger: Here's what we know so far

According to The Economic Times, the proposed merger would happen through a share swap and help boost Airtel’s non-mobile revenues through convergence. Airtel will hold a majority stake of around 52-55 per cent in the combined entity while Tata Play shareholders, including Walt Disney, would hold 45-48 per cent. The combined entity is likely to be run by Airtel’s senior management, though Tata is learnt to have sought two board seats.

Also Read: Disney to sell 30% Tata Play stake to Tata Group; transaction valued at $1 billion

Tata Play, India’s largest DTH player, was originally Tata Sky and began as a JV with Rupert Murdoch’s News Corp. Six years ago, the Walt Disney Company acquired Murdoch’s 21st Century Fox, taking over that stake.

The potential deal will mark the country's second major transaction in the DTH space in about a decade, following the 2016 Dish TV-Videocon D2H merger. It also comes shortly after Reliance Industries and Walt Disney merged Star India and Viacom18 to form JioStar, India’s largest media and entertainment company, with revenues of ₹26,000 crore in FY24.

Also Read: Bharti Airtel stock jumps 3%, snaps 6-day losing streak on 5G core deal with Ericsson

On Tuesday, shares of Bharti Airtel settled 2.55 per cent higher at ₹1,641.60 against a 52-week high of ₹1,778.95 apiece on the BSE. The stock has risen 47.6 per cent in one year and 8.25 per cent in the last six months. According to BSE data, the telecom giant commands a market cap of ₹9,36,048.43 crore.