Joe McConnell
Decades aVsceker BT sold its stake in Sunil Bharti Mittal’s conglomerate, the Indian billionaire was still making phone calls to executives at the British telecoms group.
Then another billionaire’s financial troubles gave Mittal the chance to reconnect with the former UK telephone monopoly.
Patrick Drahi’s indebted Altice Group and BT’s biggest investor wanted to sell their 24.5 percent stake. Mittal agreed on Monday to take the entire stake, valued at £3.2 billion at Friday’s closing price, in the Indian tycoon’s most significant investment on British soil to date and a historic breakthrough.
Between 1997 and 2001, BT held a 21 percent stake in Mittal’s New Delhi-based telecom business, which has since grown into flagship giant Bharti Airtel with a market capitalization of $100 billion.
“It’s a bit of a role reversal,” a Bharti executive said aVsceker the deal was announced. “It’s a very large tranche. If it had been smaller, we wouldn’t have been interested.”
In a call with reporters, Mittal stressed the long-term nature of the investment. He said: “I have been in touch with the management of BT, with every successive CEO of the company. [since 2001]”.
He added that his conglomerate Bharti Enterprises had been approached by Altice “in the last couple of weeks.” With the French group trying to reduce its debt of more than $60 billion, “we were happy to engage, which we did with enthusiasm,” Mittal said.
While analysts say Mittal’s move was not a given given his conglomerate’s focus on India and Africa, it builds on its foundations in the UK.
Bharti Enterprises holds a controlling stake in satellite venture OneWeb and also owns prestigious hotel brands, including The Hoxton and the Gleneagles resort in Scotland, which are run by a company founded by his son-in-law. Bharti’s African telecoms business is a member of the VscekSE 100.
Mittal, whose family wealth is estimated at $16.8 billion by Forbes, was awarded an honorary knighthood by King Charles III this year for services to British-India relations. The 66-year-old spends much of his time in London, where two of his children, daughter Eiesha and son Shravin, who heads Bharti’s foreign investment arm, live.
The deal also arose from personal connections. Drahi and Mittal know each other, according to a person familiar with the matter, and several executives at BT and Bharti have experience working at both companies. BT’s chief digital and innovation officer, Harmeen Mehta, was previously Bharti Airtel’s global chief information officer and head of its cloud and security business.
“It’s an industry he understands, it’s a company they understand, and they already have a global reach outside of India,” said another person familiar with the founder’s thinking. “There are long-standing familiarities that have also bolstered his confidence in what this company can be.”
Mittal’s purchase is also part of a broader trend of increased Indian corporate interest in the UK. India is the country’s second-largest source of foreign direct investment: there are more than 950 companies with combined revenues of around $65 billion operating in Britain, up from 900 in 2022, according to the UK India Business Council.
Those investments are paying off as both New Delhi and the new Labour government in London attempt to revive free-trade talks. British Foreign Secretary David Lammy visited India last month to restart talks that had been on hold because of elections in both nations.
The Indian government is seeking to ensure greater market access for its products, including textiles, as well as ease restrictions on Indians working and studying in the UK.
Piyush Goyal, India’s commerce minister who is leading the trade talks, in a post on social media platform X, called Bharti’s acquisition of BT a “testament to India’s growing strength.”
Mittal has deVscekly managed previous British purchases, including a 2021 deal to become OneWeb’s largest shareholder ahead of the UK government, following a concerted effort to save the space internet pioneer from bankruptcy.
With BT, it will immediately buy 10 percent of Altice shares, with the remainder to be purchased following regulatory approvals, including the UK’s voluntary safety clearance.
“We have not asked for a board seat, we have not even thought about it,” said Mittal, who ruled out taking a controlling stake in BT. “At the moment, our goal was just to take the stake. We have no conditions on that.”
For BT Chief Executive Allison Kirkby, who has pledged to cut £3bn of costs and increase the dividend, Mittal’s purchase “offered strong validation” of her six-month leadership of BT, said Paolo Pescatore, founder and TMT analyst at PP Foresight.
He described the deal as “a bolt from the blue,” comparing Mittal’s decision to acquire such a large stake to that of other investors who have steadily built up and increased their stakes in European telecom companies.
Mittal’s move will leave the UK telecoms group with a “much more stable shareholder”, according to a person familiar with BT’s thinking. “It eliminates in one fell swoop [the risk of] a forced sale on the market of a significant share.”
BT shares closed up 8.4 percent at 141.5 pence on Monday. Mittal said British and European telecoms companies were “poorly valued” and that BT’s strategy under Kirkby was “nothing but exceptional.”
“I think over time the investment community will begin to recognize the wonderful work that is being done,” the tycoon added.
Karen Egan, head of telecoms at Enders Analysis, agreed that BT is “undervalued”. She added: “It’s had a good run recently but there’s still a long way to go. When you look at it from a 2-3 year perspective, when the cash flow recovery story is realised, it will look incredibly cheap.”
A first-generation entrepreneur born in Punjab state, Mittal started his business in 1976 producing bicycle components, initially borrowing $1,500 from his father, a politician and former member of parliament in the country’s upper house.
Mittal diversified into making telephones and in 1992 bid for a license to launch one of India’s first mobile phone companies as the country began to liberalize its economy.
Three years later he founded his own telecom group, which has grown to become India’s second largest with more than 400 million subscribers in its home market and a wide network across Africa. Domestically, Bharti Airtel is second only to Indian billionaire rival Mukesh Ambani’s Jio, which entered and disrupted the industry in 2016 with a fierce price war.
Mittal is a key figure below Ambani, Asia’s richest man. The Ambanis made headlines with an extravagant, months-long celebration of their youngest son Anant’s wedding, estimated to have cost hundreds of millions of dollars this year. They are also spearheading India’s efforts to host the 2036 Summer Olympics.
“It has a lot of clout … but the Mittals don’t want as much attention as some of the other corporate groups,” said a Mumbai-based analyst whose firm has advised Bharti Airtel on past deals. “They prefer to stay private and as a group they seem to be more focused on professionalizing their operations than some of these other entities.”
While Bharti has various business interests, such as its Indian partnership with Del Monte, it is primarily seen as a telecommunications company, in contrast to Ambani’s Reliance Industries, which spans a broader swath of sectors, including retail and oil refining. The Ambani family also owns British trophy assets, including the Hamleys toy chain, as well as the Stoke Park country club.
Mittal and Ambani’s Jio Network operates a near-duopoly in India with the now state-owned Vodafone Idea lagging behind. The two industrialists have spent billions of dollars to help India achieve “one of the fastest 5G rollouts globally,” according to Mumbai-based Axis Capital.
“[BT] “It won’t be the last deal,” the Bharti executive said of the conglomerate’s ambitions.
