RCom in merger talks with Aircel

Reliance Communications (RCOM) has entered into discussions with promoters of Aircel for a possible merger, after over a month of announcement of a similar deal with MTS, Indian unit of Russia's Sistema Group.

RCom has entered into a 90-day exclusivity period with Maxis Communications Berhad (MCB) and Sindya Securities and Investments Private Limited, who are the shareholders of Aircel Ltd.

It will consider the potential combination of the Indian wireless business of RCOM and Aircel to mutually derive the expected substantial benefits of incountry consolidation, including opex and capex synergies and revenue enhancement, according to a statement by RCom.

The potential combination will exclude RCom’s towers and optical fibre infrastructure, for which RCOM is proceeding with an asset sale, as announced on December 4, 2015.

The discussions are non-binding in nature. Any transaction will be subject to due diligence, definitive documentation and regulatory, shareholders’ and other third party approvals. Hence, there is no certainty that any transaction will result, the statement added.

In November this year, RCom announced merger with Sistema Shyam TeleServices (MTS) operations with itself in an all-stock deal. Sistema will receive a 10% stake in RCom once the deal, negotiated over months, goes through.

If the three-way merger happens then the combined entity will have over 150 million customers in India. According to sources, RCom shareholders will receive free listed shares in new combined wireless entity and the debt of over Rs 10,000 crore will be transferred to separate listed combined entity.

Reliance Communications (RCOM)