Idea Shareholders Approve Merger With Vodafone
99% shareholders vote in favour of the merger; cos await NCLT, DoT approval
New Delhi: Shareholders of Idea Cellular approved the merger of the company’s mobile business with India’s No 2 carrier Vodafone, with almost all of the votes going in favour of the alliance. The Aditya Birla group firm shared the details with the stock exchanges on Friday.
Idea Cellular and Vodafone India have approached the National Company Law Tribunal (NCLT) for a nod, which had earlier ordered the companies to get shareholder approval, before the companies go to the telecom department to get a final approval to the merger.
Over 99% of Idea shareholders voted in favour of the merger at the shareholders' meeting on October12, 2017, the filing by the Aditya Birla group firm stated today.
Earlier this year, Vodafone India and Idea Cellular had agreed to merge their operations to create the country’s largest telecom operator worth of more than $23 billion and more than 400 million subscribers. The combined entity would have a revenue market share of 43% of the total market, making it the largest carrier by revenue and subscribers. The deal gives Vodafone India an implied enterprise value of .₹ 82,800 crore and Idea .₹ 72,200 crore.
The combined entity of Vodafone India and Idea Cellular would dislodge Bharti Airtel to counter the fierce price war in the world's second-largest telecom market. Airtel announced the merging of Tata Teleservices’ mobile business with itself on Thursday, strengthening its spectrum holdings, which would help it give tough competition to both Jio and Voda-Idea.
Post completion of the deal, the UK-based telco will own 45.1% stake in the merged entity while Idea's parent, will have 26% after paying .₹ 3,874 crore cash for a 4.9% stake. The remaining 28.9% will be held by other shareholders. Idea Cellular’s shares increased 5.91% to .₹ 78.9 on the Bombay Stock Exchange on Friday.