Vodafone India confirms it is considering a merger with Idea Cellular
Shares of the Aditya Birla Group's telecom company went up by 27% after the news of the possible tie-up was reported.
Vodafone on Monday confirmed media reports that had suggested its India branch was in talks with rival Idea Cellular about a possible merger. In a statement, Vodafone said it was “in discussions with the Aditya Birla Group about an all-share merger” of the two companies”.
It was earlier reported that Vodafone was reassessing its business plans after stiff competition from Reliance Jio Infocom Ltd, which is currently offering free data, voice and video calls to its users. The company on Monday said any merger would be effected through the issue of new Idea shares to Vodafone, and would “result in Vodafone deconsolidating Vodafone India”.
“There is no certainty that any transaction will be agreed, nor as to the terms or timing of any transaction,” the statement read. However, Vodafone’s 42% stake in Indus Towers will be excluded from this deal. This merged entity will become the largest Indian telecom company with a market share of roughly 43%, reported Mint. Currently, Bharti Airtel is the leader with 33% of the market share, Vodafone India has 23% and Idea has 19%.
Meanwhile, on Monday, shares of Aditya Birla Group’s Idea Cellular went up by 27% at Rs 98.95 on the Bombay Stock Exchange and Rs 99.20 on the National Stock Exchange, reported Reuters.
Vodafone India has been meaning to list itself on the Bombay Stock Exchange since 2010, however, the plans have been delayed owing to the current scenario in the mobile network market. However, the deal with Idea may give Vodafone its desired listing in India, reported the Business Standard.