India's largest telecom service provider Bharti Airtel on Thusday announced an agreement to acquire Telenor India, which has operations in seven circles - Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam.
The announcement comes after Reliance Jio has managed to garner 100 million users and country's second telecom service provider Vodafone - Idea merger.
The statement said that the proposed acquisition will include transfer of all Telenor India's assets and customer.
"It will also enable Airtel to further bolster its strong spectrum foot-print in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band," it said.
Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel, said, "The agreement underlines our commitment to lead India's digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands."
He said,"on completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles. The customers of Telenor India will now be able to enjoy India's widest and fastest voice & data network, and a range of Airtel's world-class products and services."
The proposed transaction will also create substantial long-term value for our shareholders given the significant synergies," Vittal said in the filing.
In terms of subscribers, after the acqusition Airtel will get 52.5 million users from Telenor . Currently, Airtel has 269.40 million subscribers across India.
Meanwhile, Telenor Group CEO Sigve Brekke said, "we believe today's agreement is in the best interests of our customers, employees and Telenor Group. Finding a long-term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel. The decision to exit India has not been taken lightly. After thorough consideration, it is our view that significant investments needed to secure Telenor India's future business on a standalone basis will not give an acceptable level of return."
However, the transaction is subject to requisite regulatory approvals, including approvals from the Department of Telecommunications in India and the Competition Commission of India.
The transaction is expected to close within 12 months. With effect from first quarter 2017, Telenor India will be treated as an asset held for sale and discontinued operations in Telenor Group's financial reporting.