The National Company Law Tribunal (NCLT)-Ahmedabad bench today approved the proposed merger of Idea Cellular and Vodafone India, meaning both the operators are now required to seek approval from Department of Telecommunications (DoT) once NCLT-Mumbai bench approves Vodafone's merger request. The merger deal worth $23 billion was proposed back in March 2017 and is currently India's largest M&A deal. Back at the time of announcing the merger, both the operators said that the deal would be completed in six quarters, but it is now expected to be completed much ahead of the expected time.
“The scheme is genuine, bona fide and in the interest of the creditors and the shareholders,” said the NCLT Ahmedabad bench. Vodafone India is yet to receive approval from NCLT-Mumbai bench. Both the telecom operators have already received approvals from SEBI, shareholders, Competition Commission of India (CCI). As stated, if DoT approves the merger, both the telcos can merge the operations.
If DoT approves the $23 billion deal, the merged entity will become India's largest telco with over 35% market share and an excess of 400 million customers. Idea shareholders have already approved the proposed merger.
As per the merger, Vodafone India will get an implied enterprise value of Rs 82,800 crores and Idea Rs 72,200 crores. After the merger, Vodafone India will have 45.1% stake, whereas Idea Cellular will have 26 percent after paying Rs 3,874 crore cash for a 4.9 percent stake. And the remaining 28.9% will be held by other shareholders. The merger will be completed by March 2018.
Recently, it was reported that both the operators had formed a project management office as the nodal body headed by former CEO of Vodafone Romania Ravinder Takkar. They have already started the exercise to shortlist senior executives that will play key roles in the merged entity.
