BAT Sells 3.5% Stake in ITC for $2.1 Billion
According to a report from the Indian media outlet Theweek, British American Tobacco (BAT) sold a 3.5% stake in Indian Tobacco Company (ITC Ltd) through a public market transaction on March 13, with the total transaction amount reaching 174.85 billion rupees ($2.1 billion USD).
Despite completing this major transaction, BAT remains an important shareholder of ITC, holding a 25.5% stake in the company. Other shareholders of ITC include the Singapore government, Singapore Monetary Authority, Lockheed Martin Corporation, Goldman Sachs (Singapore), Copthall Mauritius Investments, BofA Securities Europe SA, Societe Generale, Morgan Stanley Asia Singapore Limited, and Ghisallo Master Fund LP.
BAT has sold over 436.8 million equity shares through its subsidiary India Tobacco Manufacturers (India) Ltd, in 48 transactions, equivalent to a 3.5% stake in ITC. The average selling price for these shares was 400.25 Indian rupees per share, with a total transaction value of 174.85 billion Indian rupees.
Over 30 institutions purchased shares in this sale, including ICICI Prudential Mutual Fund, Motilal Oswal MF, Nippon India MF, SBI MF, Max Life Insurance Company, IMF, Capital Group, Kuwait Investment Authority, The People's Bank of China, and International Bank for Reconstruction and Development.
It is reported that BAT plans to use the net proceeds from this bulk transaction to buy back its own shares by December 2025, starting as early as 2024, with a total amount of up to 700 million pounds. In addition, BAT will continue to use operating cash flow to fund its transformation and further reduce debt.
The initial investment by BAT in ITC can be traced back to the early 20th century, with both companies maintaining a mutually beneficial relationship for an extended period of time.
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