British American Tobacco has divested a $1.5 billion interest in Indian consumer goods firm ITC at 413 Indian rupees for each share, as per a term sheet reviewed by Reuters. The firm sold 313 million shares in ITC, which corresponds to 2.5% of ITC, as stated in the term sheet. The final figure surpassed the initial plan, which aimed to sell as many as 290 million shares in the transaction, estimated at around $1.4 billion. The ultimate sale price reflected a 4.8 per cent reduction from ITC's closing price of 433.90 rupees on Tuesday.
ITC's shares fell by almost 3 per cent to 421.70 rupees on Wednesday. The stock was the biggest decliner on both the Nifty 50 and the FMCG index. Based on LSEG data, BAT will continue to be ITC's primary shareholder following the transaction. The term sheet indicated that the deal was led by Goldman Sachs and Citigroup. This agreement marks the second significant block trade in India this week, following the sale of a 5.7 per cent stake in the budget airline by IndiGo co-founder Rakesh Gangwal for $1.36 billion.
BAT announced that it would raise its 2025 share buyback program from 1.1 billion pounds ($1.49 billion) by 200 million pounds due to the agreement, which is anticipated to have no other effect on its yearly forecast. The London-listed tobacco company had sold 436.9 million shares last year, which is approximately 3.5 per cent of ITC's outstanding shares, for around $2 billion in what became India's third-largest block transaction ever. The British company predicted in February a 1 per cent increase in its yearly revenue, pointing to tax challenges in important markets like Bangladesh and Australia.
($1 = 0.7401 GBP)
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