Vodafone, Idea agree on merger in India
Britain’s Vodafone Group Plc’s Indian subsidiary agreed to merge with Idea Cellular Ltd. over the next two years, Idea said on Monday.
The deal would create India’s largest telecommunications provider, with a 35% market share. Vodafone will own 45.1% of the new entity after selling a 4.9% stake in it to holding companies that currently own Idea and which will take a 26% holding in the new company.
Idea said that the new enterprise will be worth $23.2 billion, based on the combined value of the two firms. It also said the companies expected cost and capex synergies of about $10 billion in net present value after integration costs and spectrum payments.
The deal comes as the newly-created Reliance Jio Infocomm Ltd. stormed into the market last year by offering free calls and data, forcing other carriers to slash prices and accept lower profits.