The government on Friday approved a proposal of Transcend Infrastructure, a subsidiary of US-based American Towers, to acquire the tower business of Essar Telecom, entailing an FDI inflow of about Rs 2,000 crore (Rs 20 billion).
"We have received FIPB approval for the Essar Telecom Infrastructure deal. This approval brings us a step closer towards closing the Essar acquisition for the company's 4,600 towers with a tenancy of 1.9.
"We are looking at completing all the formalities soon," an ATC spokesperson told PTI.
ATC, through Transcend, had entered into a definitive share purchase agreement with three companies of the Essar Group to acquire the entire issued share capital of Essar Telecom Infrastructure Private Ltd.
The TIL proposal entails a foreign direct investment inflow of Rs 1,932 crore (Rs 19.32 billion).
The Essar-ATC deal, which was subject to approval from the Foreign Investment Promotion Board, got the clearances from the government body that clears all major investment proposals.
Essar's tower business is one of India's largest independent tower companies, with a portfolio of 4,450 wireless communications tower sites, including a number of towers under construction.
Operating across 12 of the 22 telecom circles, Essar Tower has a tenancy -- the average number of operators using a tower -- of 1.8 per tower.
The acquisition will add 4,500 towers to American Tower's portfolio of 2,500 towers. This will be the third acquisition by the American company in India after it had bought out 1,700 towers owned by Xcel Telecom in 2009 and another 325 sites from Transcend Infrastructure for Rs 95 crore (Rs 950 million).
The government on Friday approved 18 foreign investment proposals worth Rs 2,245.32 crore, with the major inflow being accounted for by Transcend.
