Vodafone India and Idea Cellular are said to be nearing an initial agreement to merge their separate entities into a single unit creating India’s largest telecom network.
According to a Bloomberg report, the two could make the announcement for the same this month itself. Citing sources, the report said that the initial accord won’t be spelling out the merged entity’s shareholding structure because the due diligence has not yet been completed.
India’s telecom landscape is witnessing a consolidation wave post Reliance Jio’s launch. After Airtel-Telenor, the market is eagerly awaiting Vodafone-Idea merger. According to people in the know of things, Kumar Mangalam Birla would be the chairman of the new entity. Apparently, Vodafone may sell part of its stake in the merged company, while the Birlas would likely offer to buy shares from other investors post-merger to bring their holding to about 26 percent.
Earlier in January, Vodafone did confirm that it is in talks with Idea Cellular to merge its Indian business into Idea and deconsolidating the unit but the deal will exclude Vodafone’s 42 percent stake in Indus Towers Ltd., the telecom company added. Aditya Birla and Vodafone would have equal rights in the new company, Idea said in a January exchange filing.