Idea-Vodafone is going merge to become country’s biggest telecom operator
Idea-Vodafone Merge: As per the deal, Vodafone will hold 45% stakes in the new company, while Idea Cellular will have a command over 26% stakes.
- Idea Cellular and Vodafone India announce merger.
- This will become India’s biggest telecom company.
- Vodafone will hold 45% stakes in the new company.
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Idea-Vodafone today announced merger to form country’s biggest telecom company. As per the deal, Vodafone will hold 45% stakes in the new company, while Idea Cellular will have a command over 26% stakes.
A final decision and announcement were pending after March 16 meeting of top Vodafone executives, who reviewed the terms and conditions of merger and gave approval.
The executives discussed operational integration, combined infrastructure, overlaps and redundancies. Experts believe that approximately 10,000 jobs will be lost due to Idea-Vodafone merge.
VODAFONE GOT TROUBLE INDIAN JOURNEY
Since the vodafone entry in Indian market in 2007, Vodafone has become number 2 operator in the country, but its journey has been confusing as it is locked in a legal battle with the government over a 2-billion-dollar retrospective tax claim over its acquisition of Vodafone India from Hutchison in 2007.
It had written down value of business by 5 billion pound (3.35 billion dollar) late last year. The British firm has pumped in more than 7 billion dollars into the India unit.
Backed by Mukesh Ambani, Reliance Jio Infocomm is offering free voice calls and data till March and has notched up 74 million users. It has already invested over 25 billion dollars and is investing another Rs 30,000 crore (4.8 billion dollar).
The Aditya Birla group owns 42.2 per cent of Idea while Malaysian carrier Axiata Group Bhd has a 19.8 per cent stake.
Vodafone India Ltd is a wholly-owned unit of Vodafone Group Plc.
Idea rose as much as 29 per cent, the most since the shares began trading in 2007, taking the company’s market valuation above US dollar 5 billion. Vodafone gained as much as 4.1 per cent.
In a separate BSE filing, Idea Cellular said it plans to raise Rs 500 crore through non-convertible debentures on private placement basis.