ibusinesslines.com March 24, 2017

Idea, Vodafone India announcer merger, now biggest entity in telecom industry

20 March 2017, 07:04 | Jodi Jackson

Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone de-consolidating Vodafone India

Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone de-consolidating Vodafone India

Vodafone India has the largest voice and data traffic usage within the Vodafone Group and has more than 200 million customers. Idea Cellular has a net worth of Rs 24,296 crore and turnover of Rs 36,000 crore.

The combined market share of both the telecos add up to 43%, making it the largest telecom firm, surpassing Bharti Airtel.

Shares in Idea rose nearly four percent in Mumbai following announcement of the Vodafone deal.

Vodafone will hold 45 per cent stakes in the new company.

- Mobile Internet connections (2G+3G+4G): Idea has 48.58 million, while Vodafone has 65 milllion, giving the combine entity a grand total of 113.5 million connections.

- Idea's promoters would have the sold right to appoint the Chairman while the appointment of the CEO and the COO will need a nod from the promoters of both the companies.

In the merged entity, Vodafone will own 45.1% of the company, transferring a stake of approximately 4.9% to the promoters of Idea and/ or their affiliates for Rs 38.74 billion in cash.

Vodafone has 202.79 million users and Idea Cellular 187.68 million in India. According to a statement released, promoters of Idea and Vodafone will have the right to nominate three directors each. Idea will have its nominee as chairman while CFO will be from Vodafone's nominee. Aditya Birla group will then own 26% stake in the company but it will have the right to acquire more shares from Vodafone under an agreed mechanism with a view to equalize the shareholding over time. Immediately thereafter, and on the amalgamation of Vodafone India Limited, these shares will stand canceled, and Idea will then issue shares equal to 50% of post-issue paid up capital to Vodafone.

In a BSE filing Idea said, "The board of directors at its meeting held on March 20, 2017, have approved the scheme of amalgamation of Vodafone India Limited (VIL) and its wholly owned subsidiary Vodafone Mobile Services Limited (VMIL) with the company subject to necessary approvals". Until then, the additional shares held by Vodafone will be restricted, and votes will be exercised jointly under the terms of the Shareholder agreement.

Other News

Trending Now

Iowans Prepare for Monday's Supreme Court Justice Hearing
That almost year-long political stall, she suggests, should be the basis for evaluating the Republican nominee. His book fails to answer these questions, even as it raises extreme instances of government life-taking.

Dame Vera Lynn's centenary marked with Bluebirds over White Cliffs of Dover
Dame Lynn started her career at the age of 15 and she was soon put under the spotlight as a regular on BBC radio. She received an OBE in 1969, DBE in 1975 and in 1978 she was given the Freedom of the City of London.

Osinbajo Assures Edo Oil Producing Communities Of Govt Support
I can tell you how much have been voted or spent for projects in several communities and there is no sign of development there. Obaseki said he would not allow any agency to carry out any project without adhering to details in the master plan.

Sebastien Bourdais wins IndyCar season opener from last on the grid
Power is the last driver to win from the top starting spot - the first year he captured a pole at the track in 2010. France's Sebastien Bourdais won on adopted home track with defending IndyCar champion Simon Pagenaud second.

Germany owes 'vast sums of money' to North Atlantic Treaty Organisation and US
The two leaders discussed North Atlantic Treaty Organisation funding, trade agreements and the worldwide situations in Ukraine and Syria.

Landslide at Ethiopian Garbage Dump Kills At Least 50 People
The disaster flattened dozens of homes of people living in the Koshe dump when part of the largest pile of rubbish collapsed. Many of those who live at the 50-year-old landfill are scavengers who sort through the dross for items to sell.

GOP Obamacare replacement narrowly passes out of committee after 3 Republicans defect
That left House members angry over being asked to take a politically risky vote for legislation likely to be altered. Most states don't yet have firm cost estimates on the consequences of the proposal by Republicans in the U.S.