Idea-Vodafone merger may be sealed by March

The merger deal between Vodafone India and Idea Cellular is expected to be completed by March next year, as all regulatory approvals are likely to be obtained by that time, a source privy to the deal said.

“There are only two permissions left in the amalgamation scheme of the Idea and Vodafone. It should be completed by the end of the current financial year,” an industry source said.

Both the companies are before the National Company Law Tribunal (NCLT) for seeking approval, after which, they will need final approval from the Department of Telecom.

Idea Cellular will hold a meeting of shareholders and creditors on October 12 to seek their approval for the amalgamation of Vodafone India’s business with itself.

The meeting of equity shareholders, secured creditors and unsecured creditors will be held in Gandhinagar. It is being convened following directions of the NCLT bench at Ahmedabad.

Reliance Communications on Sunday announced termination of mobile business merger deal with Aircel due to “legal and regulatory uncertainties, and various interventions by vested interests” leading to “inordinate delays in receipt of relevant approvals for the proposed transaction”.

Earlier this year, Vodafone India and Idea Cellular had agreed to merge their operations to create the country’s largest telecommmunications operator worth of more than $23 billion, with a 35% market share.

The combined entity of Vodafone India and Idea Cellular, which are currently India’s number two and three, respectively, would dislodge Bharti Airtel to counter the fierce price war in the world’s second-largest telecom market.

The deal gives Vodafone India an implied enterprise value of Rs 82,800 crore, and Idea Rs 72,200 crore.

Post the transaction, the British firm will own 45.1% stake in the merged entity, while the Aditya Birla group, Ideas parent, will have 26% after paying Rs 3,874 crore cash for a 4.9% stake.

The remaining 28.9% will be held by other shareholders.