12 January 2018
| Alan Burkitt-Gray
The $23 billion merger of Vodafone India with Idea Cellular has taken a major step forward after India’s National Company Law Tribunal gave its approval to the deal.
Yesterday’s decision means only the permission
of the government’s Department of Telecom is
needed for the merger to be completed.
Two judges, chairing the tribunal in open court in Ahmedabad,
gave their sanction to the merger after a petition brought by
The court documents confirmed that Vodafone India will hold a
minimum of 45.1% of the combined company, with Idea Cellular
holding a minimum of 26%. Of the remaining 28.9%, the public
shareholding in the merged company will be a minimum of 25% of
The deal is understood to be the largest merger in Indian
corporate history, and the resulting company will have the
biggest market share in the Indian mobile industry.
According to figures from the Telecommunications Regulatory
Authority of India (Trai), Vodafone had 17.68% of the market at
the end of October 2017 and Idea had 16.20% – giving
the combination a 33.88% share. The nearest competitor is
Bharti Airtel, with 24.21% in October, but 31.43% with its
takeovers of Tata Teleservices and Telenor India.
The two companies have already jumped all the other hurdles to
reach a merger. The Competition Commission of India approved
the deal on 24 July 2017. Over 99% of Idea
Cellular’s shareholders voted in favour on 13
Both Vodafone India and Idea Cellular are selling their tower
businesses to American Tower in advance of the deal for a total
of $1.2 billion. Idea Cellular, which is controlled by the
Aditya Birla industrial and commercial group, announced last
week that it plans to raise the equivalent of $1.1 billion in
equity in preparation for the merger with Vodafone.