Money Vodafone India and Idea announce merger to create India's largest telecom company

15:25  20 march  2017
15:25  20 march  2017 Source:   International Business Times

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You are here: Home > News > Business > Vodafone India & Idea announce merger to become largest telecom operator in India . This merger could also be an after-effect of Reliance Jio’ s bullet paced penetration of the Indian telecom market.

India TELECOMS merger Vodafone RedHack Idea Cellular Reliance Jio. British mobile phone giant Vodafone 's Indian unit will merge with Idea Cellular to create India ' s largest telecoms operator, the firms said on Monday, as they combine to fight the rise of Reliance Jio.

Vodafone's Indian subsidiary has agreed to merge with Idea Cellular in a deal that will create the country's largest telecom operator.

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Vodafone Group PLC

VOD

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Mumbai: British mobile phone giant Vodafone will merge its Indian unit with Idea Cellular to create the country' s largest telecoms operator, the firms said on Monday. The board of directors of Idea Cellular at its meeting held on Monday approved the "scheme of amalgamation of Vodafone India Limited

British mobile phone giant Vodafone will merge its Indian unit with Idea Cellular to create the country' s largest telecoms operator, the firms said on Monday. Idea Cellular- Vodafone India announce merger to become country' s biggest

210.95
-0.45
-0.21%
Idea Cellular Ltd

532822

97.60
-12.35
-11.23%
Reliance Industries Ltd

RIGD

38.85
-0.05
-0.13%
Bharti Airtel Ltd

532454

349.45
+3.45
+1.00%

The two companies announced an all-share tie-up on 20 March, with Vodafone owning 45% of the combined entity and Aditya Birla Group – the conglomerate that owns Idea – holding a 26% stake.

The merger will create the widest mobile network in India and the country's largest telecom company in terms of revenue and subscribers.

It comes amidst the emergence of Reliance Jio Infocomm – backed by billionaire Mukesh Ambani – as a major player in India's telecoms sector.

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Jio offered free voice and data when it launched in September last year, forcing competitors such as Bharti Airtel and Vodafone to slash tariffs to remain competitive.

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MUMBAI: British mobile phone giant Vodafone ’s Indian unit will merge with Idea Cellular to create India ’ s largest telecoms operator, the firms said Monday, as they combine to fight the rise of Idea will hold 26 percent in the combined company and the merger will take up two two years to complete.

The merger will create the country’ s largest telecom company with Rs 80,000 crore in revenue, reported The Economic Times. “I am pleased and honoured to be the chairman of the new company ,” he said after the announcement . Vodafone will pick the chief financial officer for the

"The combination of Vodafone India and Idea will create a new champion of digital India founded with a long-term commitment and vision to bring world-class 4G networks to villages, towns and cities across India," Vodafone chief executive Vittorio Colao said.

"The combined company will have the scale required to ensure sustainable consumer choice in a competitive market and to expand new technologies – such as mobile money services – that have the potential to transform daily life for every Indian.

"We look forward to working with the Aditya Birla Group to create value for all stakeholders."

As part of the merger agreement, Aditya Birla Group has the right to acquire more shares from Vodafone under an agreed mechanism and achieve parity in shareholdings over time.

Vodafone will also deconsolidate Vodafone India and if Vodafone and Aditya Birla Group's shareholdings in the combined company are not equal after four years, Vodafone will sell down shares to equalise its shareholding with Aditya Birla over the following five-year period.

Vodafone and Idea intend to sell their standalone tower assets to reduce leverage in the combined company.

The merger is expected to be completed next year, subject to regulatory approvals.

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