Airtel ends merger talks with Tata over loss-making DTH business
What's the story
Bharti Airtel has officially called off talks with the Tata Group over a possible merger of their Direct-To-Home (DTH) businesses. The telecom giant announced the decision in a regulatory filing. The talks, which started in February, were aimed at merging Airtel Digital TV with Tata Play, both of which are operating at a loss. However, the two parties couldn't come to a mutually agreeable deal.
Information
Tata Play's history and valuation
India's leading DTH provider, Tata Play, was originally known as Tata Sky. It began as a joint venture with Rupert Murdoch's News Corp, which The Walt Disney Company acquired six years ago when it bought Murdoch's 21st Century Fox.
Impact
Merger could have boosted Airtel's non-mobile revenue
The proposed merger was to be executed via a share swap, which would have boosted Airtel's non-mobile revenue. According to an Economic Times report earlier this year, Airtel was tipped to own a majority stake (over 50%) in the combined entity. This deal could have been the second major transaction in India's DTH sector in nearly a decade, following the Dish TV-Videocon d2H merger in 2016.
Ownership
Tata Sons owns 70% of Tata Play
Tata Sons, the diversified conglomerate's holding company, owns 70% of Tata Play. It bought Singapore investment firm Temasek Holding Pte's 10% stake in April 2024 for ₹835 crore ($100 million), valuing the company at $1 billion—down from its $3 billion pre-pandemic valuation. Airtel Digital TV belongs to Bharti Telemedia Ltd, a wholly owned subsidiary of Bharti Airtel.