American Tower Corp inks $2.5-bn deal to sell India unit to Brookfield-backed DIT

ATC India-DIT deal

Brookfield Asset Management-sponsored Data Infrastructure Trust has signed a definitive agreement with the US-based American Tower Corporation to acquire 100 percent equity interests in ATC India.

Moneycontrol was the first to report on January 4 that top Canadian investor Brookfield had pipped rival suitor I Squared Capital and emerged as the lead contender in a twist in the last leg of the transaction.

DIT houses Brookfield’s telecom tower businesses in India through Summit Digitel and Crest Digitel. According to an official statement, total cash proceeds to American Tower at closing, subject to certain pre-closing terms, would potentially represent up to Rs 210 billion, or $2.5 billion, at today’s exchange rates. The transaction, which reflects the completion of the previously announced strategic review of American Tower’s operations in India, is subject to customary closing conditions, including government and regulatory approvals, and is expected to close in the second half of 2024.

Total cash proceeds include an enterprise value on the ATC India operations of approximately $2 billion, plus a ticking fee that accrues from October 1, 2023, to the date of closing. Proceeds associated with the enterprise value assume the repayment of existing intercompany debt and the repayment, or assumption, of the existing India term loan, by DIT.

ATC India has a portfolio of approximately 78,000 sites across the country. This will be Brookfield’s third acquisition in the Indian telecommunications space. In 2022, it had acquired a portfolio of 5,000 indoor business solution sites and small cell sites, which helped advance the rollout of 5G and enabled telecom operators to extend their coverage ambit in difficult-to-access and dense areas.

Brookfield also has a portfolio of roughly 175,000 towers that were acquired in 2020 from Reliance Industrial Investments and Holdings Limited. ATC India will add to DIT's telecommunication assets.

"The acquired sites are expected to diversify DIT’s revenues and increase touch points with all mobile network operators in India," said a statement from the Canadian investment giant.

Arpit Agrawal, managing director and head of infrastructure for India and the Middle East at Brookfield, said, “We look forward to expanding and enhancing our existing telecom tower portfolio in India, which enables a broader array of solutions for our customers and partners. Through strategic acquisitions like ATC India, we remain deeply committed to empowering digital connectivity and transforming the telecom infrastructure landscape across the region.”

In India, Brookfield has approximately $25 billion in assets under management across infrastructure, real estate, renewable power and transition and private equity.

In October, ATC informed the US Securities and Exchange Commission (SEC) that it has taken a $322-million goodwill impairment charge for its India unit in the quarter ended September 2023 amid a challenging business environment due to a delay in payments from one of its main vendors Vodafone Idea.

Considered within the total potential cash proceeds, American Tower will retain the full economic benefit associated with the optionally converted debentures (OCDs) issued by Vodafone Idea and will be entitled to receive future payments related to existing ATC India receivables. Proceeds from the transaction are expected to be used to repay American Tower’s existing indebtedness.

Citi will be the lead financial advisor and CDX Advisors the financial advisor to American Tower. Talwar Thakore & Associates (TT&A) is serving as the principal legal advisor to American Tower. S&R Associates represented Brookfield-backed DIT, according to an official statement.