Indian conglomerate Bharti Enterprises is set to become the largest shareholder in the UK's BT Group by acquiring a 24.5% stake from billionaire Patrick Drahi's Altice for approximately $4 billion.

The transaction, announced on August 12, will be executed in two phases: an initial purchase of 9.99% followed by the remaining 14.51%, pending regulatory approval.

This deal will be scrutinized under the UK's National Security and Investment Act 2021, which allows for the examination of acquisitions for national security concerns.

Analysts estimate the initial stake's value at around £980 million, emphasizing the significance of this investment for both Bharti and BT.

While the acquisition presents a positive outlook, analysts caution about several risks, including BT's substantial pension fund, network competition, and regulatory challenges.

Sunil Bharti Mittal, chair of Bharti Enterprises, expressed confidence in BT's management and strategy, highlighting the potential for long-term value.

Analysts believe Bharti's investment could enhance investor confidence in BT, suggesting there may be unrecognized value within the company.

Following the announcement of the deal, BT's shares rose by approximately 6.4%, indicating a positive market reaction despite remaining below their 2019 peak.

The sale is part of Altice's strategy to reduce its significant debt, which exceeds $60 billion, amidst ongoing financial difficulties and a corruption investigation.

Despite not pursuing a full takeover, this investment represents a strategic move for Mittal in the competitive UK telecom market.

Bharti Global anticipates that this investment will foster new synergies in telecommunications between the UK and India, particularly in areas like AI and 5G development.