CCI Approves Merger of Vodafone and Idea
The Competition Commission of India (CCI) has finally approved the merger of Vodafone India with Idea Cellular.
Aditya Birla Group- led Idea Cellular also confirmed the same in a BSE fling. “Idea Cellular is pleased to confirm receipt of the letter from the Competition Commission of India dated 24th July 2017, according to approval to the proposed merger of Vodafone India, Vodafone Mobile Services Limited, and Idea Cellular under sub section (1) of section 31 of the Act,” the company said The idea further said that “The transaction is expected to close during the calendar year 2018 subject to customary approvals.”
The deal, announced in March this year, will create the country’s largest mobile phone operator worth more than $23 billion with a 35 percent market share. Post the transaction, Vodafone will own 45.1 percent stake in the merged entity while the Aditya Birla group, Idea’s parent, will have 26 percent shareholding after paying Rs. 3,874 crores cash for a 4.9 percent stake. The remaining 28.9 percent will be held by other shareholders. The combined entity of Aditya Birla Group’s Idea Cellular and Vodafone India will have the widest network in the country and pan-India 3G/4G footprint, the companies said in a statement.
“The combination of Vodafone India and Idea will create a new champion of Digital India founded with a long-term commitment and vision to bring world-class 4G networks to villages, towns, and cities across India. The combined company will have the scale required to ensure 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 for every Indian. We look forward to working with the Aditya Birla Group to create value for all stakeholders.”
The CCI approval is a “very welcome development for both the Indian M&A landscape and the telecom sector and will serve to fuel more investment in capacity and coverage across a battling telecom sector,” Shweta Shroff Chopra, partner at legal firm Shardul Amarchand Mangaldas & Co, representing Vodafone India to CCI,.