The National Company Law Tribunal has approved the proposed merger between Idea Cellular and Vodafone – a move that brings both the companies closer to culminating the deal.
“We wish to inform you that the Hon’ble National Company Law Tribunal, bench at Ahmedabad, vide its order dated January 11, 2018 has sanctioned the composite scheme of amalgamation and arrangement among Vodafone Mobile Services Limited and Vodafone India Limited and Idea Cellular Limited…,” Idea Cellular said in a regulatory note.
Both the groups can go ahead for the final approval for merger from the Department of Telecom after Vodafone’s appeal for the scheme also gets NCLT nod.
As per latest data published by sector regulator TRAI, Idea and Vodafone jointly have over 40 crore mobile subscribers and together account for the largest share in Indian telecom segment. Vodafone is expected to hold around 47.5 percent stake in the merged entity and rest will be owned by Idea and promoter Aditya Birla Group.
The proposed merger of Vodafone India and Idea will create an entity with a revenue of around Rs. 77,500-80,000 crores besides eliminating duplication of spectrum and infrastructure capex, as per India Ratings and Research.
Further, the spectrum of Vodafone India in seven circles and that of Idea in two, whose permits are expiring in 2021-22, is together valued at around Rs. 12,000 crores as per last auction price. These permits are not in common circles, and hence there could be potential spectrum capex synergies between the two companies, as per the rating agency.