Vodafone Idea Board approves merger with Aditya Birla Telecom

Sep 18, 2018 16:05 IST
Vodafone Idea Board approves merger with Aditya Birla Telecom

The Board of Directors of Vodafone Idea Limited, India's largest telecom operator, on September 17, 2018 approved merger of the Vodafone Idea Limited with the Aditya Birla Telecom Limited (ABTL), the parent company of Idea Cellular.

The merger was approved under the relevant provisions of the Companies Act, 2013. The merger is now subjected to approval of the National Company Law Tribunal.

Key Highlights

The Aditya Birla Telecom Ltd holds 11.15 percent stake in telecom infrastructure firm Indus Towers Ltd.

With this amalgamation, Vodafone Idea will directly have shareholding in Indus Towers and can monetise the stake held by ABTL following simplification in the corporate structure.

Note

Indus Towers is a jointly owned by:

  • Aditya Birla – 11.15 percent
  • Vodafone- 42 percent
  • Bharti Airtel – 42 percent

The Indus Towers is in process of merging with Bharti Airtel’s tower subsidiary Bharti Infratel.

The amalgamation will give management control to Vodafone Idea to run businesses of the subsidiaries, strengthen its financial position and raise resources against the assets owned by ABTL such as investments in mutual funds, Indus Towers stake including monetisation of such assets.

There will be no change in shareholding pattern of Vodafone Idea after completion of the amalgamation.

Timeline: Vodafone - Idea Merger

January 2017 - Vodafone and Idea Cellular began talks for a merger deal.

April 2017 - Vodafone India announced to sell 9.5 percent stake to Aditya Birla, the promoters of Idea.

July 2018 – Vodafone - Idea merger deal received its final approval from the Department of Telecom.

July - August 2018 – The merger got statutory approvals from SEBI NSE, BSE, CCI and the National Company Law Tribune.

August 2018 - The merger of Vodafone India and Idea Cellular completed on August 31, 2018, creating India's biggest telecom service provider with over 408 million subscribers.

Note: Vodafone and Idea Cellular had kept stake in Indus Towers out of their merger agreement.

 

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