Idea Cellular in a regulatory filing on Monday said, its Board of Directors "have approved the scheme of amalgamation of Vodafone India Limited and its wholly owned subsidiary Vodafone Mobile Service Limited with the company (Idea)."
Kumar Mangalam Birla, chariman of the Birla group, will head the new entity, agencies reported today.
I am pleased and honoured to be the chairman of the new company: Kumar Mangalam Birla after Vodafone India-IDEA merger (file pic) pic.twitter.com/p7csrklCuz— ANI (@ANI) March 20, 2017
Both Vodafone and Idea will have equal stake in the merged entity for a period of time, PTI quoted chiefs of both companies as saying.
“Money for buying 4.9 pc of Vodafone stake (Rs 3,874 cr) will come from promoters and not from Idea,” PTI quoted Birla as saying. Birla has also ruled out any major downsizing at Idea after the merger.
Meanwhile, Vodafone CEO Vittorio Colao said that the merger makes possible synergies of $10 billion. “Vodafone and Idea brands to operate separately post the merger as both are very strong,” Colao said adding that Vodafone’s ongoing tax dispute would have no impact on the merger.
The ongoing tax dispute with govt not to affect the merger: Colao.— Press Trust of India (@PTI_News) March 20, 2017
The combined entity had net debt of Rs 1.07 trillion as of December 2016.
"For Idea shareholders and lenders who have supported us thus far, this transaction is highly accretive, and Idea and Vodafone will together create a very valuable company given our complementary strength," Kumar Mangalam Birla, Chairman, Aditya Birla Group, said earlier today.
"The combined company will have the scale required to ensue sustainable consumer choice in a competitive market and to expand new technologies - such as mobile money services - that have the potential to transform daily life of every Indian," he added.