Canada-based Brookfield Asset Management to buy ATC India in $2 bn deal

Canada-based Brookfield Asset Management to buy ATC India in $2 bn deal

Canada-based Brookfield Asset Management has announced its acquisition of the Indian business of American Tower Corporation (ATC) for an enterprise value of Rs 16,628 crore ($2 billion). This deal marks Brookfield’s third acquisition in India’s telecom sector in just four years, solidifying its position as the largest manager of telecom towers in the country.

Brookfield Asset Management Expands Telecom Tower Portfolio in India

Under the agreement, Data Infrastructure Trust (DIT), an infrastructure investment trust sponsored by an affiliate of Brookfield Asset Management, will acquire 100% of the equity interests in ATC India. Currently, DIT houses Brookfield’s telecom tower businesses in India through Summit Digitel and Crest Digitel. The acquisition of ATC India’s sites is expected to diversify DIT’s revenues and strengthen its relationships with all mobile network operators in India.

ATC India, which was established in 2007, has built an extensive portfolio of approximately 78,000 tower sites across the country. The deal will provide total cash proceeds to American Tower at closing, potentially amounting to approximately Rs 21,000 crore or $2.5 billion at current exchange rates.

Brookfield’s portfolio will be further enhanced by the addition of ATC India’s tower sites, which will complement the roughly 175,000 towers acquired from Reliance Industrial Investments and Holdings Limited in 2020. Reliance Jio, the anchor client for Brookfield, has been a significant contributor to its telecom tower business.

Consolidation in India’s Tower Industry Signals Strong Growth

With the combined entity expected to have over 253,000 towers, Brookfield will surpass the current market leader, Indus Towers, which currently has 204,000 tower sites as of the quarter ending September 2023. This consolidation reflects the need for a more streamlined tower industry, as it is believed that a fragmented industry would not be beneficial in the long run.

Ankit Jain, Vice President and Sector Head at ICRA, commented on the consolidation, stating that it was always anticipated. In a consumer industry dominated by three players, a fragmented tower industry would not provide the desired benefits. Jain also highlighted that while Brookfield’s Summit Digitel primarily serves Reliance Jio, ATC India has a more diversified portfolio of tenants.

The acquisition of ATC India by Brookfield Asset Management sends strong signals of growth and consolidation in India’s tower industry. As the telecom sector continues to expand rapidly, this deal positions Brookfield as a major player in the country’s telecom infrastructure landscape.

Overall, this acquisition will strengthen Brookfield’s presence in India and contribute to the development of robust telecom infrastructure to meet the growing demands of the nation’s digital economy.