Vodafone, Idea clinch $23 bn deal to be numero uno player

TIL Desk Business/Mumbai/ Vodafone India and Idea Cellular today agreed to merge their operations to create the country’s largest mobile phone operator worth more than USD 23 billion with a 35 per cent market share. This means the combined entity of Vodafone and Idea Cellular, which are India’s number 2 and 3 mobile players, respectively, will overtake Bharti Airtel in a bid to tackle a raging price war in the world’s second-largest market.

The British firm will own 45.1 per cent of the merged entity while the Aditya Birla group, Idea’s parent company, will own 26 per cent after paying Rs 3,874 crore cash for a 4.9 per cent stake, the two firms announced at a press conference here. The remaining 28.9 per cent will be held by other shareholders.

The new company, which will come into being over the next two years, will be headed by Kumar Mangalam Birla while Vodafone will have the right to appoint chief financial officer. The CEO and the chief operating officer will be appointed with approval of both companies. The two firms will have three nominees each on the board of the new entity. Aditya Birla and Vodafone eventually aim to own an equal share of the joint venture.