Vodafone-Idea merger expected to complete in 2018

New Delhi: The merger of Vodafone India Ltd and Idea Cellular Ltd is set to be completed ahead of time in 2018, the companies said on Tuesday.

The Vodafone-Idea merger will create India’s largest telecom firm, eclipsing Bharti Airtel Ltd and pose a formidable challenge to new entrant and disruptor Reliance Jio Infocomm Ltd.

“We welcome the decision of the Competition Commission of India approving the proposed merger of Vodafone India and Idea Cellular, following its comprehensive review of the transaction. It is expected that other statutory approvals will be forthcoming and we anticipate completing the transaction during 2018,” Aditya Birla Group chairman Kumar Mangalam Birla and Vodafone Group CEO Vittorio Colao said in a joint statement on Tuesday.

Both firms had earlier anticipated to complete the merger within 24 months from the date of announcement. The Vodafone-Idea merger was announced on March 20 this year.

The Competition Commission of India (CCI) on Monday cleared the merger of Vodafone India and Idea Cellular in a $23 billion deal that will create the country’s largest telecom operator.

“The $23 billion transaction is the largest by value in the history of Indian M&A,” Shardul Amarchand Mangaldas and Co. said in a statement.

At present, Bharti Airtel leads the mobile telephony segment in the country with 23.59% market share in terms of mobile subscriber base. Post merger, Vodafone, with market share of 17.86%, and Idea with a market share of 16.62% will eclipse the Sunil Mittal-led firm.

The merged entity will have almost 400 million users and a 35% market share in terms of customers. The deal gives Vodafone India an implied enterprise value of Rs82,800 crore and Idea an enterprise value of Rs72,200 crore. Post the transaction, Vodafone will own 45.1% stake in the merged entity while the Aditya Birla group, Idea’s parent, will have 26% shareholding after paying Rs3,874 crore cash for a 4.9% stake. The remaining 28.9% will be held by other shareholders.

IDEA Cellular Limited