British American Tobacco trims ITC stake by 2.5% in Rs 12,941 crore deal to boost financial flexibility
British American Tobacco Plc (BAT) on Wednesday divested a 2.5 per cent stake in Indian conglomerate
ITC Ltd
for Rs 12,941 crore through open market transactions, reducing its shareholding in the FMCG giant to 22.94 per cent from 25.44 per cent.
According to bulk deal data available with the National Stock Exchange (NSE), BAT's affiliate Tobacco Manufacturers (India) Ltd sold 31.30 crore equity shares of ITC at a price between Rs 413.12 and Rs 413.78 per share, PTI reported.
Following the transaction, Tobacco Manufacturers (India) Ltd's stake dropped to 17.81 per cent from 20.31 per cent. Overall, BAT holds a combined 22.94 per cent in ITC through its affiliates — Tobacco Manufacturers (India) Ltd, Rothmans International Enterprises, and Myddleton Investment Company — as of the end of the March quarter.
The identity of the institutional buyers in the deal could not be immediately ascertained from NSE data. ITC shares closed 1.19 per cent lower at Rs 421 apiece on the NSE.
In a filing to the London Stock Exchange, BAT confirmed it had completed the block trade of 31.30 crore ordinary shares of ITC through an accelerated book build process. The net proceeds from the trade amount to Rs 12,100 crore.
BAT said the deal 'will provide the group greater financial flexibility as it delivers on its commitment to invest behind transformation, deleverage and enhance shareholder returns.'
The company added that the proceeds will help extend its share buyback programme announced in March 2024 by an additional £200 million, taking the total buyback for 2025 to £1.1 billion. This extension will begin after the completion of the tranche announced on April 29, 2025, and is expected to be concluded by December 31, 2025.
BAT's Chief Executive Tadeu Marroco said, 'Whilst this transaction supports delivery on our commitments to BAT shareholders, we continue to view ITC as a core strategic component of our global footprint as we partner on business opportunities in India.
I am confident that ITC, under the stewardship of its current management, will continue to create further value for its shareholders.'
He further noted, 'ITC is a valued associate of BAT in an attractive geography with long-term growth potential where BAT benefits from exposure to the world's most populous market.'
BAT first invested in ITC in the early 1900s and has since built a longstanding relationship with the company, which remains one of India's top FMCG firms. In March 2024, BAT had offloaded a 3.5 per cent stake in ITC for Rs 17,485 crore.
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