Under their agreement, both groups will have equal voting rights in the merged entity to be headed by Kumar Mangalam Birla.
Mumbai: The boards of Idea Cellular, the Aditya Birla Group’s telecommunications arm, and Vodafone India on Monday approved the proposal to merge the two entities to create a $23.2-billion telecom giant with 35 per cent customer marketshare and 41 per cent revenue marketshare.
Under their agreement, both groups will have equal voting rights in the merged entity to be headed by Kumar Mangalam Birla, Aditya Birla Group’s chairman. To start with, Vodafone will be the dominant shareholder, with a 45.1 per cent shareholding after transferring a stake of 4.9 per cent to the promoters of Idea Cellular for Rs 3,874 crores, to be paid in cash. The Aditya Birla Group, promoters of Idea Cellular, will then own 26 per cent, with a right to acquire upto 9.5 per cent additional stake from Vodafone under an agreed mechanism to equalise the shareholding over time.
“This merger will create the country’s leading telecom service provider, with 400 million customers. This is based on the principle of equal partnership,” said Kumar Mangalam Birla, Aditya Birla Group chief.
The merger was necessitated after the aggressive launch of Reliance Jio that triggered a major price war.