Bharti will become BT's biggest shareholder after buying a 25%, $4B stake from Altice

BT, the U.K.’s former incumbent telecoms carrier, is picking up a major new investor today as telecoms companies look for stronger footing in the rapidly shifting technology and communications market. Bharti, the Indian tech and telecoms giant that owns Airtel, said it would purchase a 24.5% stake currently owned by Altice.

Based on BT’s market cap of around £13 billion ($16 billion) at the time of the deal, it values the stake at around $4 billion.

Bharti said in a statement that it would buy 9.99% immediately, and would acquire the remainder after regulatory clearance.

Altice has found itself on unstable footing over its debt-led acquisitions and corporate scandals, as detailed in this story at the end of 2023. Altice, which owns stakes in other technology and communications companies, had bought its stake in BT in several tranches, initially in 2021 and later in May 2023.

BT’s share price has dropped since then partly due to the broader decline of technology and communications stocks. And Altice now appears to be paring down its operational assets: This deal comes on the heels of its sale of media platform Teads to web recommendation platform Outbrain less than two weeks ago for $725 in cash and deferred payments, plus stock, in a transaction valued at $1 billion.

5G and AI are two of the biggest existential milestones for telcos at the moment. They might turn out to be threats, or opportunities, depending on how carriers play their cards. Bharti cited both in its rationale for this deal, likely looking for better economies of scale on both fronts in terms of purchasing, development and strategy as competition heats up from technology giants that threaten to further cannibalize telcos with new approaches to communication that bypass telco infrastructure.

“Bharti hopes that this investment will further help create new synergies in the telecom sector between both countries in the areas of AI and 5G R&D and core engineering amongst others, offering great potential to collaborate on industry best practices and emerging technologies,” the company said in a statement. Airtel, Bharti’s mobile carrier, is in hot competition with Reliance’s Jio in India in what many consider a duopoly, so investing abroad gives Bharti more diversification.

Interestingly, BT — riding high on its incumbency status in the U.K. — was once the one doing the investing: It held a 21% stake in Bharti between 1997 and 2001.

“Bharti and British Telecom (BT) have an enduring relationship going back more than two decades wherein BT owned 21% stake along with 2 board seats in Bharti Airtel Limited from 1997-2001,” noted Bharti’s founder and chairman, Sunil Bharti Mittal, in a statement. “Today marks a significant milestone in Bharti Group’s history as we invest in BT — an iconic British Company.”

BT was considerably less verbose on the news of the deal.

“We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy,” Allison Kirkby, BT’s CTO, said in a statement, the company’s only comment on the deal. “BT has enjoyed a long association with Bharti Enterprises, and I’m pleased that they share our ambition and vision for the future of our business. They have a strong track record of success in the sector, and I look forward to ongoing and positive engagement with them in the months and years to come.”

Additional reporting by Manish Singh