Bharti Airtel extends gains after combining operations with Millicom in Ghana

Bharti Airtel rose 2.02% to Rs 440.30 at 11:25 IST on BSE after the company and Millicom International Cellular S.A. announced the closure of the deal to combine their operations in Ghana.

The announcement was made during market hours today, 16 October 2017.

Meanwhile, the S&P BSE Sensex was up 94.77 points or 0.29% at 32,527.46.

On the BSE, 2.05 lakh shares of Bharti Airtel were traded on the counter so far as against the average daily volumes of 2.07 lakh shares in the past two weeks. The stock had hit a high of Rs 441.95 in intraday trade, which is also a 52-week high for the stock. The stock had hit a low of Rs 433 so far during the day. The stock had hit a 52-week low of Rs 283.95 on 9 November 2016.

The stock had outperformed the market over the past one month till 13 October 2017, gaining 7.63% compared with the Sensex's 0.77% gains. The stock had also outperformed the market over the past one quarter, rising 7.11% as against the Sensex's 1.23% rise. The scrip had also outperformed the market over the past one year, jumping 40.79% as against the Sensex's 17.33% rise.

The large-cap company has equity capital of Rs 1998.70 crore. Face value per share is Rs 5.

Bharti Airtel and Millicom International Cellular S.A. (Millicom), through their respective subsidiaries, announced the closure of the deal to combine their operations in Ghana.

Under the joint agreement, Airtel and Millicom will have equal ownership (50:50) and governance rights in the combined entity, which will have revenues of around $300 million. Both Airtel and Millicom will have board representations and management positions in the merged entity.

The Ghana National Communications Authority (NCA) granted approval for the merger proposal early this month. The merged entity will become Ghana's second largest mobile operator with close to 10 million subscribers. The combined networks of the two companies will cover more than 80% of Ghana's population, in particular in villages and far flung areas, and serve customers with affordable worldclass voice/data services, affordable global roaming and mobile banking services.

It will also have one of the largest sales and distribution network to enhance customer convenience.

The significant synergies from this merger will help the combined entity achieve profitability and cash-flow levels faster. In addition, the merged entity with its robust optic fibre footprint and increased number of data centres will bring significant benefits to diverse portfolio of enterprise customers - including both large corporations and small and medium enterprises (SMEs).

Roshi Motman, the current CEO of Tigo Ghana, will be the new CEO of the joint entity. The merged entity will be deconsolidated and treated as a strategic asset in the form of a joint venture and the company will continue to operate both brands - Airtel and Tigo. The process of business consolidation will take place over the next few weeks.

The Airtel and Millicom teams will work together to ensure smooth transition, streamlining of operations and realization of synergies to ensure swift accrual of the merger's benefits to all stakeholders.

Bharti Airtel had jumped 7.89% to Rs 431.60 on Friday, 13 October 2017 after the company and Tata, India's leading conglomerate, announced that they have entered into an understanding to merge consumer mobile businesses (CMB) of Tata Teleservices (TTSL) and TTML into Bharti Airtel. The announcement was made after market hours Thursday, 12 October 2017.

Bharti Airtel's consolidated net profit fell 58.4% to Rs 617.70 crore on 14% decline in revenue to Rs 21958.10 crore in Q1 June 2017 over Q1 June 2016.

Bharti Airtel is a leading global telecommunications company.

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