Voda­fone nears agree­ment to merge In­dia unit with Idea

New Straits Times - - Business | World -

MUM­BAI: Voda­fone Group Plc is near­ing an ini­tial agree­ment to merge its In­dian op­er­a­tions with Idea Cel­lu­lar Ltd in a deal that would cre­ate the largest telecom­mu­ni­ca­tions com­pany in one of the world’s most com­pet­i­tive mar­kets, said peo­ple with knowl­edge of the mat­ter.

The two firms plan to an­nounce a pre­lim­i­nary agree­ment as soon as this month.

The ini­tial ac­cord was un­likely to spell out the merged en­tity’s share­hold­ing struc­ture be­cause the due dili­gence had not yet been com­pleted, said the peo­ple.

Car­ri­ers in In­dia are seek­ing to con­sol­i­date af­ter Re­liance Jio In- fo­comm Ltd, backed by bil­lion­aire Mukesh Am­bani, in­tro­duced free ser­vices in Septem­ber, un­der­min­ing in­dus­try rev­enue.

The com­pet­i­tive pres­sure is cre­at­ing an al­liance be­tween the coun­try’s No. 2 provider, Voda­fone In­dia, and its third largest, Idea, con­trolled by Aditya Birla Group.

Bil­lion­aire Ku­mar Man­galam Birla will be the chair­man of the new en­tity.

Voda­fone could de­cide to sell part of its stake in the merged com­pany, while the Bir­las would likely of­fer to buy shares from other in­vestors af­ter the merger to bring their hold­ing to about 26 per cent. Bloomberg

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