Friday 29th, March 2024
canara news

Vodafone, Idea clinch $23 bn deal to be numero uno player

Published On : 21 Mar 2017


Mumbai, (PTI) Vodafone India and Idea Cellular today agreed to merge their operations to create the country's largest mobile phone operator worth more than USD 23 billion with a 35 per cent market share.

This means the combined entity of Vodafone and Idea Cellular, which are India's number 2 and 3 mobile players, respectively, will overtake Bharti Airtel in a bid to tackle a raging price war in the world's second-largest market.

The British firm will own 45.1 per cent of the merged entity while the Aditya Birla group, Idea's parent company, will own 26 per cent after paying Rs 3,874 crore cash for a 4.9 per cent stake, the two firms announced at a press conference here.

The remaining 28.9 per cent will be held by other shareholders.

The new company, which will come into being over the next two years, will be headed by Kumar Mangalam Birla while Vodafone will have the right to appoint chief financial officer.

The CEO and the chief operating officer will be appointed with approval of both companies. The two firms will have three nominees each on the board of the new entity.

Aditya Birla and Vodafone eventually aim to own an equal share of the joint venture.

The merger excludes Vodafone's 42 per cent stake in Indus Towers and will be effected through issuing new shares in Idea to Vodafone, which will result in Vodafone deconsolidating Vodafone India.

This is the second merger in the sector in as many months. Last month, Bharti Airtel announced plans to buy the Indian business of the Norway-based Telenor.

The merged venture will create India's largest mobile operator with almost 400 million users and a 35 per cent market share by customers. The deal gives Vodafone India an implied enterprise value of Rs 82,800 crore and Idea an enterprise value of Rs 72,200 crore.

Vittorio Colao, CEO of Vodafone, the world's second-biggest mobile operator by subscribers, said the two companies will continue to operate under their current brands indefinitely, but will eventually work under the same name.

He did not expect major regulatory hurdles to the deal as he ruled out any chance of the lingering tax dispute with the government to affect the merger process.

Idea Cellular fell 7.9 per cent to Rs 99.50 after surging as much as 14.5 per cent. .

 







More News

Sensex, Nifty fall 1% as crude oil prices surge
Sensex, Nifty fall 1% as crude oil prices surge
Aamir Khan calls 'Thugs of Hindostan' role one of his toughest
Aamir Khan calls 'Thugs of Hindostan' role one of his toughest
Fuel prices continue to fall as global crude rates ease
Fuel prices continue to fall as global crude rates ease

Write your Comments

Disclaimer: Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. canaranews.com will not be responsible for any defamatory message posted under this article.

Please note that under 66A of the IT Act, sending offensive or menacing messages through electronic communication service and sending false messages to cheat, mislead or deceive people or to cause annoyance to them is punishable. It is obligatory on CANARANEWS to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using canaranews will be purely at your own risk, and in no way will canaranews.com be held responsible.