Birla-Tata- AT&T, BPL merger creates $2b cellular company

MUMBAI: In what is being touted as the biggest merger in corporate India,

cellular giants Birla-Tata-AT&T (Batata) and BPL Communications on Thursday

entered into a joint venture whose combined value is being estimated at $2

billion. This has resulted in the forming of the largest cellular company in

India and would enjoy a subscriber base of close to one million.

According to the reports released after the pact, Batata would have a 50.7

per cent stake in the new company and the BPL consortium would hold the

remaining 49.3 per cent.

Madhya Pradesh, Gujarat, Chattisgarh, Maharashtra, Goa, Andhra, Tamil Nadu

and Kerala would receive services from the new entity.

The historic merger means Hutchison will go down to the number two slot with

eight lakh subscribers followed by Bharti with a little over six lakh

subscribers.

Addressing a joint press conference here, Tata Industries chairman Ratan Tata,

AV Birla group chairman Kumarmangalam Birla and BPL Innovision chairman Rajeev

Chandrashekhar said the new company would bid for the fourth cellular zone in

India.

ABN Amro Asia Corporate and JM Morgan Stanley structured the whole merger.

The joint venture, however, would not affect BPL’s Maharashtra franchise.

It is likely to become a separate unit and could be soled off later, officials

in the BPL consortium said.

Meanwhile, Ratan Tata said, " The management structure of the new

company would remain the same for the time being. The companies would continue

as individual operators in their respective circles." According to industry

analysts, this move can spark off a fresh round of consolidation in the Indian

cellular market.