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British telecom major Vodafone and Aditya Birla group-run Idea Cellular on Monday announced the merger of their Indian operations, creating the largest mobile operator by customer and revenue market share.
Also Read: Idea Cellular, Vodafone India Announce Merger To Create India’s Largest Telecom Company
Here what all you need to know about the historic Idea Cellular and Vodafone India merger:
The Vodafone India and Idea Cellular merger will become no.1 player in the India telecom market by pushing Bharti Airtel from no.1 to no.2. Currently, Vodafone is at no. 2 and Idea is at no.2 in Indian market.
After Vodafone-Idea merger, employees from the company will be fired too, as the merger will result in duplication of resources across the country.
The merged entity, which will come into force over the next two years, will be headed by Kumar Mangalam Birla as Chairman.
Vodafone will have its nominee as the chief financial officer, its CEO Vittorio Colao said here at a press meet, which was also attended by Birla.
The all-share merger for both partners excludes Vodafone's 42 per cent stake in Indus Towers and will be effected through issuing new shares in Idea to Vodafone and result in Vodafone deconsolidating Vodafone India.
Vodafone will own 45.1 per cent in the new company after transferring 4.9 per cent to the Aditya Birla group for Rs 3,874 crore in cash concurrent with completion of the merger.
Idea will hold 26 per cent of the combined entity while the rest will be owned by public shareholders.
Idea and Vodafone said the merged entity will be jointly controlled by Vodafone and the Aditya Birla group as per shareholders' agreement.
According to CLSA report in January, the merged entity will have revenue of over Rs 80,000 crore, translating into a 43 per cent share by revenue and 40 per cent by active subscriber base with around 400 million customers.
The combined venture will account for over 25 per cent of the allocated spectrum and will have to sell about 1 per cent (worth Rs 5,400 crore) to comply with spectrum cap norms.
The companies had a net debt of Rs 1.07 trillion as of December 2016.