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Idea Cellular-Vodafone India merger gets approval from NCLT’s Ahmedabad bench

January 12, 2018

Idea Cellular has received approval from National Company Law Tribunal (NCLT)-Ahmedabad for its proposed merger with Vodafone Mobile Services and Vodafone India. As per the NCLT-Ahmedabad bench, the merger scheme was noted to be genuine, bona fide and in the interest of the creditors and the shareholders. However, Vodafone is awaiting its approval from the NCLT –Mumbai bench.

Both operators have received approvals from the Securities and Exchange Board of India (SEBI), shareholders, Competition Commission of India (CCI) and will have to get clearances from the Department of Telecommunications (DoT).

Earlier, Idea Cellular had stated that the cost reduction from the merger in turn will be used to strengthen the customer base and provide high quality service to the customers. The higher spectrum availability and larger scale radio access along with re-deployment of overlapping equipment from rationalised sides will also lead to lower capital expenditure.

Under the agreement, Vodafone will own 45.1 per cent of the combined company after transferring a 4.9 per cent stake to the Aditya Birla Group for Rs 39 billion in cash, concurrent with completion of the merger. The Aditya Birla Group will then own 26 per cent of the combined company and Idea's other shareholders will own the remaining 28.9 per cent stake. Beyond this, it can acquire another 9.5 per cent stake from Vodafone under an agreed mechanism with a view to equalising the shareholdings over time.

 
 

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