Vodafone Group Plc Chief Executive Vittorio Colao underscored the UK-based telecom carrier's commitment towards "creating greater professional opportunities" for its India staff following the mega merger of its India unit with Idea Cellular.
For the two companies - Idea Cellular and Vodafone India - the potential for reducing costs is significant, according to India Ratings. Aditya and Vodafone eventually aim to own an equal share of the joint venture.
The merged entity, which will come into force over the next two years, will be headed by Kumar Mangalam Birla as Chairman.
The report further quoted the CEO saying that the combined entity would "benefit from the strength of both brands, based on an identity and brand strategy, which will be defined in detail in closing".More news: Comey says 'no information' to support Trump wiretapping claims
Post the completion of the merger, Idea's promoters will have the right to acquire 9.5 percent additional stake from Vodafone.
Vodafone, the world's second-largest cellphone operator, will own 45.1 percent of the merged entity, after it transfers about 4.9 percent to promoters of Idea and/or their affiliates for 38.74 billion rupees ($592.15 million) in cash, Idea said.
"Vodafone Group and Idea Cellular announced they have reached an agreement to combine their operations in India (excluding Vodafone's 42 per cent stake in Indus Towers) to create India's largest telecom operator", a joint statement by the companies said. The scheme of amalgamation includes Vodafone India (VIL) and its wholly-owned subsidiary Vodafone Mobile Services (VMSL) merging with the new company. Idea's turnover is Rs 36,000 crore.
"The name of the combined listed company will be changed in due course", the statement added. The merger makes possible synergies of Dollars 10 billion, Colao added.More news: Congress awaits FBI, NSA testimony on Russia-Trump links
Colao said that to help the Birla group increase the shareholding in the combined company after four years, Vodafone will sell shares over the following five-year period. If the Aditya Birla Group does not equalise its stake, Vodafone will reduce its holding in order to equalise its ownership with that of the Aditya Birla Group.
The new puffed-up wireless operator would boast 395 million subscribers, over and above those of market leader Bharti Airtel Ltd. It closed around 10 per cent down at Rs 97.60 per share in the BSE.
The combined entity is expected to cross the spectrum cap in 900 Mhz band in Maharashtra, Gujarat, Kerala, Haryana and UP West and in 2,500 Mhz band in Maharashtra and Gujarat.More news: Trial scheduled to begin for former Penn State president Graham Spanier
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