British American Tobacco Offloads $1.5 Billion ITC Stake at ₹413 Per Share

Image Source: Tobacco Insider

British American Tobacco (BAT) has initiated a $1.5 billion stake sale in ITC Ltd, pricing the shares at ₹413 apiece, marking a significant portfolio recalibration. The move comes as BAT seeks to streamline its holdings while maintaining its majority stake in ITC.

Stake Sale Details:

BAT is selling approximately 2.3% of its stake in ITC, reducing its holding from 25.4% to 23.1%.
The block deal is valued at ₹13,300 crore, with shares priced at ₹413 each, reflecting an 8% discount to ITC’s last traded price.

Market Reaction:

ITC shares fell 4% following the announcement, as investors reacted to the stake dilution.
The transaction is expected to be executed via an accelerated book-build process, targeting institutional investors.

Strategic Portfolio Adjustment:

BAT aims to reduce debt and increase its share buyback program by £200 million, bringing the total to £1.3 billion ($1.74 billion).
Despite the sale, BAT reaffirms its commitment to ITC, calling it a core strategic component of its global footprint.

Investment Banking Involvement:

Goldman Sachs and Citigroup are leading the transaction, ensuring efficient execution.

Historical Context:

This marks BAT’s second major ITC stake sale in a year, following its $2 billion offloading of 3.5% stake in 2024.

Strategic Outlook:

BAT’s stake reduction aligns with its global restructuring strategy, ensuring financial flexibility while maintaining long-term exposure to India’s consumer market.

Source: Financial Express, News18, CNBC-TV18, Economic Times.