Vodafone nears agreement to merge India unit with Idea
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