Merger of Idea Cellular and Vodafone India gets final government approval
The two firms will now approach the Registrar of Companies to complete the last leg of formalities.
Aditya Birla Group Chairman Kumar Mangalam Birla confirmed on Thursday that the government had given its final approval to the merger of Idea Cellular with Vodafone India, PTI reported.
The Department of Telecommunications had given conditional approval on July 9 and had sought over Rs 7,200 crore from both companies on account of one-time spectrum charges and spectrum liberalisation fees. The two companies made the payment earlier this week – partly in cash and the rest in bank guarantees.
“We have given final approval for the merger as the companies have paid the required dues,” an unidentified senior official from the department told Mint.
The two firms will now approach the Registrar of Companies to wrap up the last leg of formalities, an official told PTI. Kumar Mangalam Birla will be the non-executive chairperson and Balesh Sharma the new chief executive officer of the merged entity, Vodafone Idea Limited.
In March, the boards of both companies had approved the proposed merger, which is expected to create the country’s largest telecom company, with Rs 80,000 crore in revenue. It will leave the telecom market with three private players – Bharti Airtel, Vodafone Idea and Reliance Jio.
The combined operations of Idea and Vodafone are worth more than $23 billion (over Rs 1.5 lakh crore), with a 35% market share and a subscriber base of about 430 million, PTI reported. The merger saves both the debt-ridden firms from competition in the market. The combined debt of both firms is estimated to be about Rs 1.15 lakh crore.