SUMMARY
- Bharti Airtel is in advanced discussions with the Tata Group to buy its DTH business Tata Play.
- Tata Play has been operating at a loss.
- This agreement would mark the second merger between the two entities.
India’s telecom giant, Bharti Airtel, is in advanced discussions with the Tata Group to buy Tata Play, a direct-to-home (DTH) business that has been operating at a loss.
A ET report suggests that this acquisition is intended to solidify Airtel’s position in the digital TV sector and to enhance the company’s combined offerings, with the goal of increasing non-mobile income through integration.
Should this deal go through, it would signify Tata’s withdrawal from its unprofitable content and entertainment ventures. This agreement would mark the second merger between the two entities, following Bharti’s acquisition of Tata’s struggling consumer mobility division in 2017, which was integrated two years later.
A source stated, “The group had bet on the growth of Tata Play and recognised its strategic value until the dynamics of the market changed.”
“The group has been clear that it must maintain a position of strength and scale in any market. That did not materialise as hoped with Tata Play. In contrast, Tata Play aligns well with Airtel’s strategic plans and its portfolio of offerings to consumers,” the source added.
This would be N Chandrasekaran’s first divestment as Chairman of Tata Sons upon assuming his role in the company.
The holding company, Tata Sons, owns 70% of Tata Play following the acquisition of Singapore-based Temasek Holdings Pte’s 10% share in April for Rs 835 crore or $100 million. This deal valued Tata Play at $1 Billion, a decrease of one-third from its pre-pandemic valuation of $3 billion.
While Disney currently holds a 30% stake in Tata Play, the company is looking to exit the television distribution market after reorganizing its media portfolio and integrating its media assets with Reliance Jio in India. Disney gained its stake in Tata Play through Sky following its 2019 merger with Rupert Murdoch’s 21st Century Fox. Prior to Temasek Holdings Pte’s investment, Tata had also acquired a minority interest in the venture.
Airtel is expected to pay Tata Play a price similar to that of Temasek Holdings for the acquisition, as stated in reports. The initial plan was to bring Tata’s stakes together and pursue a stock market listing, with filings made in 2022. However, Tata suspended its IPO plans in August.
This development comes just months after Bharti Airtel announced its decision to shut down its music streaming service, Wynk Music. Additionally, Airtel has also announced a collaboration with Apple to offer exclusive deals for Apple TV+ and Apple Music to its subscribers. Users of the Wynk Premium service will be transitioned to Apple Music and will enjoy exclusive benefits.
