India’s largest conglomerate Tata Group has explored selling its struggling telecom and related assets to the country’s most valued company Reliance Industries Ltd (RIL) even as Bharti Airtel remains a strong contender to acquire them.
While talks with RIL chairman Mukesh Ambani’s disruptive telecom venture Reliance Jio may not progress, it assumes significance for being the first such deal talk between the country’s two corporate goliaths emerging from the cold war of the past.
The two groups haven’t had much business ties in the past and even restricted recruiting employees from each other. The last decade’s telecom battles saw Tatas and Ambanis pitched on opposite sides.
This started changing with Tata Trusts and Reliance Foundation collaborating in areas such as high-speed connectivity and cancer care. More recently, Tata bagged the Jamshedpur franchise of Indian Super League — a men’s professional football league co-managed by RIL.
New Tata chairman N Chandrasekaran is working on a time-bound plan to sort out the telecom mess, and has asked his deal-makers to explore all options. In June this year, TOI quoted UK research firm CCS Insight to first report that M&A experts were betting on Bharti Airtel acquiring Tata Tele.
Sunil Mittal-led Bharti would be interested in a bundled acquisition of Tata Tele and related assets, especially DTH unit Tata Sky and the world’s largest submarine network through Tata Communications.
Chandrasekaran is said to be keen to reduce the over Rs 30,000-crore debt in Tata Tele after Tata Sons bought out Japanese partner NTT DoCoMo. The group’s holding company, Tata Sons, recently decided to infuse Rs 12,000 crore in the telecom arm to improve its financial metrics. Tatas have had several discussions to sell off their telecom business in the past, including protracted talks with Vodafone before the UK-based transnational forged a merger with Idea Cellular.
By Baishakhi Dutta
