Amazon to buy stake in Bharti Airtel
The American Multinational Conglomerate Amazon is in early-stage talks to buy a stake worth $2 Billion in Bharti Airtel.
Bharti Airtel is India’s third-largest Telecom Operator with more than 300 million subscribers and a Market Capitalization of Rs.3.1 Lakh crore. If the planned investment is made by Amazon, then Amazon would acquire a 5% stake in Airtel based on the current market value of the Company.
In recent times, American Tech Giants are finding growing attraction for India’s digital consumer market. In April 2020, Social Media Giant Facebook had bought 9.99% stake in Reliance Jio which is India’s largest Telecom Operator and a rival of Bharti Airtel. The deal was closed at a cost $5.7 Billion.
The discussions between Amazon and Bharti Airtel comes up at a high time where global companies are eyeing stake in Reliance Jio. Bharti Airtel had a turbulent year with unprecedented losses as it was hit by Adjusted Gross Revenue (AGR) dues alongside the tough competition posed by Reliance Jio.
If Amazon buys the stake as planned, it will help Bharti Airtel cut its debt of $15.7 Billion. However, the talks between the Companies has just been initiated and the terms of the deal could be changed at any time. As on date, there is no agreement reached by Amazon and Bharti Airtel.
As the news of talks between Amazon and Bharti Airtel came out, the share prices of Bharti Airtel surged up by 6% and ended at Rs.583.25 on NSE today.
Amazon considers India as a crucial growth market. It has already committed investments worth $6.5 Billion towards expanding its eCommerce services in India. In recent years, the Company had also expanded its digital offerings in India and seeks to tap a rising number of internet users in the country of 1.3 billion people soon.
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