UK-based Vodafone Group’s India unit and Birla’s Idea Cellular have moved a step forward in creating the biggest telecom company in India as their merger has received a nod from the Competition Commission of India (CCI).
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Reportedly, the CCI has sent approval letters to both of the groups, meaning that the 2nd and 3rd ranked Vodafone and Idea, respectively, have no hurdles in joining hands.
Vodafone India and Idea Cellular had first announced that they’ll be going into a merger on March 20, 2017.
“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 had earlier said.
The combined subscriber count of both these companies is more than 400 million, giving them a massive 35 percent customer market share and 41 percent revenue market share.
Following the merger, the joint entity formed by the companies will have a revenue of over Rs 80,000 crore.
“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.
Promoters of Idea Cellular will hold 26 percent of the company share and the rest will be held by the public. The Chairman of the joint venture between two of the biggest telecom operators in the country will be Kumar Mangalam Birla, Chairman of the Aditya Birla Group.