NCLT approves Idea-Vodafone merger proposal; shares erase losses

Rodiano Bonacci
Gennaio 13, 2018

Two judges, chairing the tribunal in open court in Ahmedabad, gave their sanction to the merger after a petition brought by Idea Cellular.

"The scheme is genuine, bona fide and in the interest of the creditors and the shareholders", said the Ahmedabad bench. The $23 billion deal, conceived in March a year ago in response to Reliance Jio's dominance in the telecom sector, is believed to be the largest transaction in the history of Indian M&A. Back at the time of announcing the merger, both the operators said that the deal would be completed in six quarters, but it is now expected to be completed much ahead of the expected time. Vodafone is awaiting its approval from the NCLT -Mumbai bench. Both the telecom operators have already received approvals from SEBI, shareholders, Competition Commission of India (CCI).

If DoT approves the $23 billion deal, the merged entity will become India's largest telco with over 35% market share and an excess of 400 million customers. Over 99 per cent of Idea shareholders voted in favour of the merger at the shareholders' meeting on October 12, 2017, stock exchange filing by Idea Cellular stated.

Under the agreement, Vodafone will own 45.1% of the combined company after transferring a 4.9% stake to the Aditya Birla Group for Rs 3,900 crore in cash, concurrent with completion of the merger.

The proposed merger of Vodafone India and Idea will create an entity with a revenue of around Rs 77,500-80,000 crore besides eliminating duplication of spectrum and infrastructure capex, as per India Ratings and Research.

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