British American Tobacco (BAT) has pared down its pre-Independence era holding in ITC Limited, offloading a 2.5% stake worth $1.4 billion through an expertly crafted secondary market transaction.
This marks BAT’s second major reduction in twelve months, following last March’s $2 billion divestment of its crown jewel Asian asset.
Legal Teams Untangle 80 Years of Regulatory Complexity
Shardul Amarchand Mangaldas (SAM) and Herbert Smith Freehills guided BAT through the minefield of India’s FDI-restricted tobacco sector, where foreign shareholders face unique divestment challenges. AZB & Partners and Ashurst navigated the buy-side complexities for underwriters Goldman Sachs and Citigroup in executing this delicate block trade.
Partners Mithun V Thanks and Manjari Tyagi led the SAM team, supported by principal associates Deepika Goyal and Shraddha Suryavanshi, senior associate Doorva Tripathi, and associates Pankhuri Swarnim and Kashvi Vachhani.
The End of an Imperial Legacy?
With BAT’s stake now reduced to 23%, market observers question whether this 1940s-vintage investment will eventually be unwound completely. The transaction showcases how India’s legal and financial ecosystems can facilitate exits from even the most historically entrenched foreign holdings in sensitive sectors.
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Why This Deal Matters Beyond the Numbers
More than just a portfolio rebalancing, this divestment represents:
A test case for exiting FDI-restricted holdings
The evolution of colonial-era corporate ties
Investment banks’ growing sophistication in executing large block trades
Indian law firms’ ability to handle multi-jurisdictional stake sales
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Disclaimer: This update is published for informational purposes and reflects publicly available deal information. For inquiries or corrections, please contact our editorial team.
