Brookfield cancels $1.6bn Indian telecom tower deal

The Canadian fund manager said it still hopes to develop a scalable communications infrastructure presence in India and is evaluating several portfolios.

Brookfield Infrastructure has called off its plan to acquire a portfolio of more than 40,000 telecom towers from India’s Reliance Communication, the asset manager said in its third-quarter results.

The Canadian firm explained that the $200 million it had agreed to pay for a stake in Reliance Telecom was conditional on a merger between Reliance Communications and Indian mobile network operator Aircel, among other conditions.

“The merger will not proceed and therefore our transaction as previously announced will not proceed either. However, we continue to monitor the evolving situation to determine if revised terms can be agreed upon,” said Brookfield.

Brookfield and its institutional partners signed the binding agreements last December to buy a 49 percent stake in the Indian tower business for as much as $1.6 billion. The Reliance portfolio represents around 10 percent of the country’s telecom towers.

Brookfield added that it remains “patient” in pursuing this and several other potential opportunities in this sector. “In particular, we are evaluating a number of tower portfolios in the hopes of developing a scalable presence in India,” it said.

Last week, Airtel, India’s largest telecom player, said it was approached by several global investors to acquire a significant stake in Infratel, its telecom tower business, while Infratel is considering expanding its portfolio to 161,000 towers – equivalent to a 40 percent-plus market share in the country – by increasing its stake in Indus Towers.

Telecoms aside, Brookfield also agreed last August to acquire two road assets in southern India for $100 million. The two roads are in the advanced stages of construction and are therefore partially tolling, with full commissioning expected early next week.

“This acquisition is a tuck-in to our existing portfolio of Indian toll roads, bringing Brookfield’s total road portfolio in this country to over 600km,” it said. The fund manager bought a portfolio of six toll roads in 2015 in its first major infrastructure deal in India.