India - UK: Indian Acquisitions / Investments Drive Relations
STORIES, ANALYSES, EXPERT VIEWS
Bharti Enterprises acquiring 24.51% stake in BT last week for $4 bn makes it one the biggest outbound deals by an Indian company. BT is Britain's biggest broadband and mobile company with a market cap of £13.8 bn (about Rs1.48 lakh cr).
The acquisition involves the purchase of equity from Altice UK, owned by Israeli-French telecom billionaire Patrick Drahi, who also owns auction house Sotheby’s. Bharti Televentures UK has already secured a 9.99% stake in BT through an open market trade and plans to acquire the remaining 14.51% after receiving the necessary regulatory clearances. Led by Barclays Bank and Linklaters as key advisors, the complex deal was stitched smoothly. On completion, Bharti Enterprises will emerge as the largest shareholder of BT.
This move, writes Dhanendra Kumar (former Additional Secretary, Telecom, GoI) “also reflects the deepening ties between Indian and British business, coming soon as it does after the visit of British foreign secretary David Lammy last month. Britain and India had then announced the launch of a new technology security initiative to foster cooperation in critical emerging technology.”
India second-largest source of FDI in Britain
Britain’s withdrawal from the EU in 2020 has deepened Britain-India relations, with India becoming the second-largest source of FDI in Britain -- 961 Indian companies generating $65 billion in revenue. Earlier, the trend was reflected in several significant acquisitions by Indian companies. The Tata Group acquired Tetley Tea in 2000 for £271 mn, Jaguar Land Rover in 2008 for $2.3 bn, and Corus Group in 2007 for $12 bn, renaming it Tata Steel Europe.
Last year, Tata announced a $5.1 bn investment in a British EV battery factory. Reliance Industries acquired British battery tech company Faradion earlier in 2021 for $135 mn, not to mention the branded toystore chain Hamleys in 2019 for $88.5 mn. Wipro bought Britain-based consultancy firm Capco in 2022 for $1.45 bn. Eicher Motor, known for its Royal Enfield motorcycles, acquired the iconic British brand Royal Enfield. Mahindra & Mahindra revived the historic BSA Motorcycles brand in 2021. TVS Motor Company acquired British bikemaker Norton in 2020, and later bought a 70% stake in EBCO for e-bike production in Britain. Wadhawan Global Capital led a £32 mn investment in British digital bank Zopa in 2017.
With 14 rounds completed, Kumar writes “negotiations for the India-Britain FTA, which has bipartisan support, are slated to resume soon. The FTA aims to double bilateral trade by 2030, currently almost £40 bn, benefitting India’s textiles, apparel and gems sectors. India-Britain collaboration in critical areas such as AI, semiconductors, and high-performance computing is also in the works….”
Technology Security Initiative (TSI): The bilateral Technology Security Initiative (TSI) was launched last month and spearheaded by national security advisors of both countries, Ajit Doval and Tim Barrow. TSI aims to expand collaboration in key sectors such as telecom, critical minerals, AI, quantum, health-biotech, advanced materials and semiconductors.
Bharti’s acquisition of a strategic stake in BT, along with renewed India-Britain relations, concluded Kumar “should open doors for synergies in the telecom industry.’
