Vodafone India and Idea to merge to create country's biggest telecom player

Idea will have sole rights to appoint a Chairman, while Vodafone has the right to appoint the Chief Financial Officer.

In its filing to BSE, Idea had said that after the deal, its promoters will hold a 26% stake in the resultant entity, while Vodafone will hold 45.10% after its promoters would transfer a 4.9% stake to Idea promoters for Rs 3,874 crore in cash.

The merger is set to create India's largest network, with around 35 percent of market share and an nearly 400 million strong customer base.

The new entity will likely have around 40 crore customers or almost one in every three customers in the country.

As per IBEF, India is now the second-largest telecommunication market and has the third highest number of internet users in the world.

On the one hand, Idea Cellular and Vodafone India on Monday (March 20) announced a merger to form the country's biggest telecom company.

Indicating Vodafones intention of gradually exiting the country, Colao and Birla said that over a period, both will have equal stakes in the merged entity.

Celtics hold off Wizards for 110-102 win
The fourth saw the Celtics closing out the game cautiously, doing their best not to drop the lead they had worked so hard to get. The Celtics surprisingly held a significant advantage on the glass, outrebounding the Wizards 31-16 in the first two quarters.

The merger, while subject to several regulatory approvals, comes at a time when the telecom sector is going through intense competition, with Mukesh Ambani-led Reliance Jio throwing down the gauntlet to established operators.

Analysts at India Ratings beleive the two companies can complement each other - Idea has a strong presence in rural areas and Vodafone India in urban areas - and will be more competitive together.

The combine - the name and brand identity of which will be decided in due course - will be jointly managed with three representatives each on a 12-member board. If Birla chooses not to exercise the option, Vodafone will sell down shares to equalize its shareholding with Idea.

The implied enterprise value of the deal is INR828 billion, equivalent to USD12.4 billion, for Vodafone India, and INR722 billion or USD10.8 billion for Idea.

Investors have welcomed Vodafone's move to address its most hard market, with the deal enabling the British company to reduce leverage and gain additional financial flexibility which could help it to invest more in Europe.

Before the transaction is completed, Vodafone and Idea also plan to sell their standalone tower assets and Idea's 11.15 per cent stake in Indus Towers to reduce leverage in the combined company. "The combined company will have the scale required to ensue sustainable consumer choice in a competitive market and to expand new technologies - such as mobile money services - that have the potential to transform daily life of every Indian", he added.

To compensate Vodafone for the difference, Idea will contribute an additional stake in a telecom-towers business, which might be worth $1 billion, and a bit less net debt.

Recommended News

  • Food makers

    Food makers "dragging their heels" on United Kingdom salt reduction targets - CASH

    All of the study information on salt in bread and bread products is now included in the George Institute's FoodSwitch app. Almost 1500 bread products over seven years were studied, including loaves, crumpets and flat breads.
    Aid worker claims Angelina Jolie adopted son Maddox using false information

    Aid worker claims Angelina Jolie adopted son Maddox using false information

    One of the angry tweets branded her "shameless" while another furious tweet said: " Angelina Jolie is a trick ass ho in this pic". Cambodian aid worker Mounh Sarath ( right ) claims the documentation Jolie used to adopt her eldest son, now 15, was falsified.

    Trump's Allegations of Obama Wiretapping Him Are False: FBI, NSA

    Susan Collins, R-Maine said Sunday. "I don't know the basis for President Trump's assertion". Neither Rogers nor Comey have spoken publicly about the president's allegation.
  • Apple May Debut Their AR Efforts in the Next iPhone

    Apple May Debut Their AR Efforts in the Next iPhone

    However, this iPhone is rumored to have a 5.8-inch display and a glass casing, which weren't present on AAPL's first smartphone. The original iPhone, iPhone 3G and iPhone 3GS both had curved rear casings, made with either aluminium or plastic.
    Bill Gates Tops World Rich List Again While Trump Falls 220 Spots

    Bill Gates Tops World Rich List Again While Trump Falls 220 Spots

    The rich are getting richer, and if you don't believe us just check out Forbes.com's new list of the world's billionaires. The combined fortunes of this year's billionaires totaled to $7.67 trillion, up from $6.48 trillion in 2016.

    Tillerson to skip meeting of North Atlantic Treaty Organisation foreign ministers

    In Beijing, Tillerson said the US and China should work together to get North Korea to take a "different course". However, some experts argue that stronger actions are not necessary at this time.
  • Customs Uniform Saga: Presidency Backs Ali Against Senate

    Customs Uniform Saga: Presidency Backs Ali Against Senate

    Jemibewon described Hameed Ali, a retired colonel, as a fine military man who should not belittle himself with customs uniform, Premium Times reports.
    Money Doesn't Buy Happiness (In America, at Least)

    Money Doesn't Buy Happiness (In America, at Least)

    Jeffrey Sachs , the director of Sustainable Development Solutions Network (SDSN) which published the World Happiness Report said. The report also said people in China were no happier than they had been 25 years ago while happiness has fallen in America.
    On International Day of Happiness, Egypt Ranks 120 in World Happiness Report

    On International Day of Happiness, Egypt Ranks 120 in World Happiness Report

    South Sudan, Liberia, Guinea, Togo, Rwanda, Tanzania, Burundi and the Central African Republic were at the bottom. In the middle ranks were per capita GDP , freedom to make life choices and healthy life expectancy at birth.
  • Drake's New Album Breaks Spotify and Apple Music Streaming Records

    Drake's New Album Breaks Spotify and Apple Music Streaming Records

    While Skepta's sound may be tough to swallow at first, it's not hard to see why he is a favorite of Drake and Kanye West. At over one hour long, you would think " More Life " would get boring, but for a playlist, it's surprisingly cohesive.
    Microsoft releases Windows 10 cumulative update 14393.969

    Microsoft releases Windows 10 cumulative update 14393.969

    We fixed a reliability issue from Build 15061 resulting in Microsoft Edge hanging and becoming completely unresponsive. You might want to check your auto-update permissions/settings if you are so inclined to avoid this update.
    WhatsApp text status feature is back, on demand

    WhatsApp text status feature is back, on demand

    Further, according to a report in Android Police, WhatsApp is testing the ability to directly add GIFs via Google's Gboard keypad. Now the Facebook-owned app has made a decision to bring back the old one while still giving the option to use the new one.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.