Vodafone-Idea merger gets final Government approval

Jul 26, 2018 17:53 IST
Vodafone-Idea merger gets final Government approval

The Department of Telecom (DoT) on July 26, 2018 gave the final approval to the merger of Vodafone India and Idea Cellular.

The approval for Vodafone-Idea merger came days after Idea Cellular and Vodafone India jointly paid Rs. 7,268.78 crore 'under protest' to the DoT.

With this approval, both the entities will now approach Registrar of Companies (RoC) for stipulated filings for approval, completing the last leg of formalities.

The merged identity will be known as ‘Vodafone Idea’ that will create India's largest mobile-phone company. Kumar Mangalam Birla, Chairman of Aditya Birla Group, will be the Non-Executive Chairman of Vodafone Idea while Balesh Sharma, Chief Operating Officer of Vodafone India, will be the CEO.

The merger was announced in March 2017.

Highlights of the merger

• Vodafone will hold 45.1 percent of the combined entity, Vodafone Idea.

• Idea promoters will hold 26.1 percent of the entity.

• Aditya Birla Group will have right to buy 9.5 percent stake in the new entity.

• Idea will have the sole right to appoint the Chairman of the new company.

• Vodafone has right to appoint CFO of the company.

• On the other hand, the appointment of CEO and COO will require an approval of both the companies.

• The entity or the combined entity will be jointly controlled by Aditya Birla Group and Vodafone.

• Vodafone will deconsolidate Vodafone India immediately.

Other significant mergers in Telecom Sector

Merger of Bharti Airtel and Telenor India: Bharti Airtel will buy Telenor India in a no-cash deal and will take over its outstanding spectrum payments of Rs 1650 crore.

Reliance Jio acquires RCom's wireless assets in USD 3.75 billion deal: Debt-laden Reliance Communications in December 2017 sold its wireless assets to Reliance Jio Infocomm for a total value of around USD 3.75 billion or Rs 240 billion.

Tata Tele offers its services under Bharti Airtel's network operations: After separating from Japan's DoCoMo, Tata Teleservices Limited sold its consumer mobile business with 40 million subscribers to Bharti. As a part of the deal, Tata Teleservices Limited will transfer the business on ‘cash free and debt free’ basis to Bharti.

 

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