Idea shareholders okay Vodafone merger

NEW DELHI: Shareholders of Idea Cellular approved the merger of the company’s mobile business with India’s No 2 carrier Vodafone, with almost all of the votes going in favour of the alliance. The Aditya Birla group firm shared the details with the stock exchanges on Friday.

Idea Cellular and Vodafone India have approached the National Company Law Tribunal (NCLT) for a nod, which had earlier ordered the companies to get shareholder approval, before the companies go to the telecom department to get a final approval to the merger. Over 99% of Idea shareholders voted in favour of the merger at the shareholders' meeting on October 12, 2017, said the filing.

Earlier this year, Vodafone India and Idea had agreed to merge operations to create the country's largest telecom operator worth more than $23 billion and with 400 million-plus subscribers.

The combined entity would have a revenue market share of 43% of the market, making it the largest carrier by revenue and subscribers. The deal gives Vodafone India an implied enterprise value of Rs 82,800 crore and Idea Rs 72,200 crore.

The combined Vodafone-Idea entity would dislodge Bharti Airtel to counter the fierce price war in the world's second-largest telecom market. Airtel announced the merging of Tata Teleservices’ mobile business with itself on Thursday, strengthening its spectrum holdings, which would help it give tough competition to both Jio and Voda-Idea.

Post completion of the deal, the UKbased telco will own 45.1% in the merged entity while Idea's 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. Idea shares increased 5.91% to Rs 78.9 on the Bombay Stock Exchange on Friday.