Back in March, India's leading telco Bharti Airtel announced that it's going to acquire Tikona Digital Network's business. Today, Airtel has informed the Department of Telecommunications (DoT) that it has fully acquired Tikona Digital Network's share capital and also quoted that Tikona is now a wholly-owned arm of Airtel.
“We have initiated the process of merging Tikona Digital (the transferor company) with Bharti Airtel (the transferee company) as per the applicable law,” Bharti Airtel’s chief regulatory officer, Ravi Gandhi, wrote, in a letter, dated August 31, to the DoT. ET has seen a copy of the letter.Tikona Digital (the transferor company) with Bharti Airtel (the transferee company) as per the applicable law,” Bharti Airtel’s chief regulatory officer, Ravi Gandhi, wrote, in a letter, dated August 31, to the DoT. This news was first reported by Economic Times.
The report also cites that Airtel will now seek DoT clearance after NCLT approves its merger with Tikona. Ravi Gandhi also stated that a copy of the merger documents “would be submitted to DoT pursuant to the filing of the same before the appropriate authority,” in this case the National Company Law Tribunal (NCLT).
In March 2017, Airtel entered into a definitive agreement with Tikona Digital Networks to acquire the 4G business. Now, Tikona's 4G business including the Broadband Wireless Access (BWA) spectrum and 350 sites in five telecom circles will be controlled by Airtel.
Currently, Tikona has 20MHz spectrum in the 2300MHz band in Gujarat UP (East), UP (West), Rajasthan and Himachal Pradesh circles. As per the agreement, the acquisition of the 4G business in Gujarat, UP (East), UP (West) and Himachal Pradesh will be undertaken by Airtel, while in the Rajasthan circle, it will be accomplished through Airtel’s subsidiary Bharti Hexacom Limited. Post-acquisition, the combined spectrum holding of Airtel in these five circles will be within the spectrum caps prescribed by the Government.
The total acquisition deal is for Rs. 1,600 crore. Right after Airtel announcing the merger with Tikona, the Mukesh Ambani-led Reliance Jio complained to telecom department that the deal should be blocked. Reliance Jio alleged that "Airtel is exploiting a gap in M&A rules through this deal, which actually is a spectrum trading deal."
However, the merger is now finished without any issues. Also, this merger will put Airtel against the Vodafone-Idea merger in both spectrum wise and service wise.
