Brookfield Acquires ATC India Business in $2.5 Billion Deal

06 Jan, 2024

In a significant move within the telecom tower sector, Brookfield Asset Management announced a monumental M&A deal on Friday.

The plan entails the acquisition of a 100% stake in American Tower Corporation’s (ATC) India business for a substantial $2.5 billion (Rs 21,000 crore). This figure comprises a $2 billion (Rs 16,500 crore) enterprise value and an additional 'ticking fee' accruing from October 1, 2023.

Prior to this, I Squared Capital, a Miami-based infrastructure investment group, had been in negotiations to acquire ATC’s tower assets in India, proposing an enterprise value ranging between $1.5-$1.75 billion.

Brookfield, executing the acquisition through its affiliate Data Infrastructure Trust (DIT), is set to become India's largest telecom tower operator, surpassing Indus Towers. The deal, anticipated to finalize in the second half of 2024, subject to regulatory approvals, comes at a critical juncture for ATC India. The company has encountered challenges in running its tower business due to heavy reliance on just two telecom operators, particularly Vodafone Idea, which defaulted on payments amid financial struggles.

ATC's $322-million (approximately Rs 2,700 crore) goodwill impairment charge in the July-September quarter reflects the tough business conditions in India. Brookfield's affiliate DIT, already the owner of Summit Digitel and Crest Digitel, has now added ATC to its portfolio, marking the third acquisition in the Indian telecom tower space.

With a combined total of 253,000 towers (78,000 from ATC and 175,000 previously held by Brookfield), the company positions itself ahead of Indus Towers, boasting 204,000 towers. Brookfield foresees diversified revenues and increased touchpoints with all mobile network operators in India through these acquired sites, reinforcing its presence in the competitive telecom infrastructure landscape.

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