UK based BAT to sell 3.5% ITC stake worth Rs 16,775 crore

“ITC is a valued associate of BAT in an attractive market with long-term growth potential where BAT benefits from exposure to the world’s most populous market,” BAT said. BAT’s initial investment in ITC dates back to the early 1900s and the two companies have a longstanding, mutually beneficial relationship, it said.

The block deal price band ranges from Rs 384 to Rs 400.25. ITC shares closed 1.26 per cent lower at Rs 404.25 on the BSE on Tuesday.

As one of India’s leading FMCG enterprises, ITC has delivered significant value for its shareholders and BAT continues to be fully supportive of ITC’s management team, performance and strategy, BAT said.

BAT intends to use the net proceeds of the block trade to buy back BAT shares over a period ending December 2025, starting with 700 million pounds in 2024. “We will continue to allocate operating cash flow to fund investment in our transformation and to further deleverage,” it said.

Tadeu Marroco, Chief Executive of BAT, said: “I am confident that ITC, under the stewardship of its current management, will continue to create further value for its shareholders. We look forward to remaining important shareholders in ITC as it continues its journey of growth.”

“With this transaction BAT can accelerate the start of a sustainable buyback, while enabling us to continue to deleverage towards a new target range of 2-2.5x adjusted net debt / adjusted EBITDA,” Marroco said.

ITC, a major contributor to its profits being derived from cigarettes, additionally possesses an information technology firm, a food products division, and a packaging company. The firm is presently in the process of demerging its hotel business, with existing ITC shareholders being extended the opportunity to receive shares in the new entity. ITC made a turnover of Rs 70,251.28 crore and a profit of Rs 18,753.31 crore for FY2023.