The planned merger of Vodafone India and Idea Cellular has been approved by the nation’s antitrust watchdog the Competition Commission of India (CCI), the Economic Times reports. The tie-up will combine India’s second and third largest wireless providers by subscribers to create an operator with a market share of approximately 35%, giving it a comfortable lead on current number one player Bharti Airtel, which represents roughly 23% of the sector. Whilst the CCI’s clearance of the deal takes the pair a step closer to the merger, the agreement still needs approvals from the Department of Telecommunications (DoT) and the Securities and Exchange Board of India (SEBI).
As previously reported by TeleGeography’s GlobalComms Database Idea and Vodafone agreed to a ‘merger of equals’ in March this year. Under the agreement, Idea Cellular will be amalgamated with Vodafone India and its wholly owned subsidiary, Vodafone Mobile Services Limited (VMSL). Following the merger, shares equal to 50% of the new entity’s post-issue paid up capital will be issued to Vodafone India’s UK-based parent, which will then sell a roughly 4.9% stake to the promoters of Idea Cellular – Aditya Birla Group – and their affiliates for INR38.7 billion (USD591.2 million) in cash. As such, Vodafone Group will hold a 45.1% stake in the new company, whilst Aditya Birla will own 26.0%, and Idea’s other former shareholders will take the remaining 28.9%.
In other Indian M&A news, Delhi-based ISP Nextra Teleservices has denied claims that fibre-to-the-home (FTTH) provider Atria Convergence Technologies (ACT) was in talks with the operator regarding a potential acquisition. According to the Economic Times, ACT’s CEO had told the news outlet that the firm was negotiating with the likes of Nextra, Spectranet and Excitel Broadband as the group looks to expand beyond southern India. Representatives from Spectranet and Excitel were also cited as denying holding exploratory talks with ACT.