New Delhi/Mumbai: In one of the biggest mergers in the telecom space, Vodafone India and Aditya Birla Group-promoted Idea Cellular on Monday announced their much-awaited amalgamation.
Kumar Mangalam Birla, Chairman of the Aditya Birla Group, will be its Chairman. "Vodafone Group and Idea Cellular announced they have reached an agreement to combine their operations in India (excluding Vodafone's 42 per cent stake in Indus Towers) to create India's largest telecom operator," a joint statement by the companies said. "The combined company would become the leading communications provider in India with almost 400 million customers, 35 per cent customer market share and 41 per cent revenue market share," it added.
Idea Cellular in a regulatory filing said its Board of Directors "has approved the scheme of amalgamation of Vodafone India Ltd and its wholly owned subsidiary Vodafone Mobile Service Ltd with the company (Idea)". The merger will create an entity with over Rs 80,000 crore revenue. "Vodafone will own 45.1 per cent of the combined company after transferring a stake of 4.9 per cent to the promoters of Idea and/or their affiliates for Rs 3,874 crore in cash concurrent with the completion of the amalgamation," the statement said. "The promoters of Idea will hold 26 per cent of the company and the balance will be held by the public."
The merged entity will have around a 406 million subscriber base, replacing the current dominant player Bharti Airtel (around 269 million customers). "This landmark combination will enable the Aditya Birla Group to create a high quality digital infrastructure that will transition the Indian population towards a digital lifestyle and make the government's Digital India vision a reality," said Kumar Mangalam Birla. "Idea and Vodafone will together create a very valuable company given our complementary strength," he added. Vittorio Colao, Chief Executive, Vodafone Group Plc, said: Both Idea Cellular and Vodafone India are present in all 22 telecom circles in India and have 4G connectivity in 17 circles. The agreement contemplates the completion of the proposed amalgamation within 24 months.