The acquisition aims to strengthen Airtel’s presence in the struggling digital TV segment and enhance its bundled offerings, ultimately boosting non-mobile revenues through convergence
Tata Sons, the holding company of the diversified conglomerate, currently owns 70% of Tata Play after acquiring Singapore investment firm Temasek Holdings Pte’s 10% stake in April for INR 835 Cr ($100 Mn)
Airtel is expected to acquire Tata Play at a valuation similar to that of the Temasek deal, as per the report
Telecom major Bharti Airtel is reportedly in advanced talks with the Tata Group to acquire Tata Play, a direct-to-home (DTH) business that has been operating at a loss.
According to an ET report, the acquisition aims to strengthen Airtel’s presence in the struggling digital TV segment and enhance its bundled offerings, ultimately boosting non-mobile revenues through convergence.
If the acquisition succeeds, it will represent Tata’s exit from its underperforming content and entertainment operations. This would be the second agreement between the two business groups, following Bharti’s acquisition of Tata’s struggling consumer mobility business in 2017, which was integrated two years later. This also marked N Chandrasekaran’s first divestment as chairman of Tata Sons after he assumed leadership of the group holding company.
“The group had bet on the growth of Tata Play and recognised its strategic value until the dynamics of the market changed,” an executive close to the development told ET. “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.”
Tata Sons, the holding company of the diversified conglomerate, currently owns 70% of Tata Play after acquiring Singapore investment firm Temasek Holdings Pte’s 10% stake in April for INR 835 Cr ($100 Mn). This acquisition valued the company at $1 Bn, a decline of one-third from its pre-pandemic valuation of $3 Bn.
Walt Disney owns 30% of Tata Play but has been seeking to exit the TV distribution business after streamlining its portfolio and merging its media operations with Reliance Jio in India. Disney inherited its stake in Tata Play through Sky after its 2019 mega-merger with Rupert Murdoch’s 21st Century Fox. Before acquiring Temasek’s stake, Tata had also purchased the minority stake held by Tata Opportunities Fund in the venture.
Airtel is expected to acquire Tata Play at a valuation similar to that of the Temasek deal, as per the report. The original plan was to consolidate the Tata stakes and pursue an IPO, with documents filed in 2022. However, Tata suspended the listing plan in August.
The development comes months after telecom major Bharti Airtel announced plans to shut down its music streaming platform Wynk Music. Besides, Airtel also announced a partnership with Apple to offer exclusive deals for Apple TV+ and Apple Music to its customers. Wynk Premium users will transition to Apple Music and benefit from exclusive offers.
