Softbank in talks to buy 15-20% stake in Vodafone-Idea Cellular entity: Report

Japanese telecom major Softbank is reportedly in talks with Vodafone Plc to buy 15-20 % stake in its India unit, which is likely to be merged with Aditya Birla Group-owned Idea Cellular. Masayoshi Son-owned Softbank is currently in the process of finalising its $100 billion Vision Fund, which is being helmed by Indian-born Rajeev Mishra. The fund is likely to scout for buyout deals, including in the telecom sector in India.

mobile-india-network

At the global level, Softbank has also invited Vodafone to be an investor in the Vision Fund, Economic Times reported.

An entry of a new investor will allow Vodafone Plc to reduce its shareholding in the merged company to below 50%. The move will further allow Vodafone to deconsolidate its debt-ridden Indian operations from its books, and could also enable the company to gradually exit the Indian market, Economic Times reported.

The report also said that a new investor would also help bridge the gap between the shareholding of Vodafone and Idea as well as its promoter-the Aditya Birla group in the merged company.

“Even though some other large financial institutions and funds have been tapped, discussions with Softbank are fast progressing fast. It could come in a significant investor with a minority stake of between 15-20% stake in the company; a person was quoted as saying by the publication.

Vodafone Plc owns 100 per cent of Indian entity, while the Aditya Birla group owns just 42% of Idea Cellular. Vodafone India has larger revenues and users as compared to Idea Cellular.

The report added that an investor like Softbank could infuse capital in the Vodafone-Idea merged entity to take on players like Reliance Jio, backed by conglomerate RIL.

Also read: Airtel plans to poach Vodafone, Idea customers in six circles ahead of merger

Last month, Vodafone and the Aditya Birla Group confirmed that they are in talks to explore an all-share merger of Vodafone India (excluding Vodafone’s 42% stake in Indus Towers) and Idea. Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in the UK company deconsolidating Vodafone India.

PTI had earlier reported the two companies might announce further progress on merger talks this month.

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

guest
0 Comments
Inline Feedbacks
View all comments

Recent Posts

iQOO3 With Snapdragon 865 SoC Gets Price Cut of Rs 13,000

iQOO3 has recently received a price cut of Rs 13,000, and it is visible on the official product page of...

Gionee Max Pro Slated to Launch on March 1 With 6,000mAh Battery in India

Gionee is trying to capture consumers attention in India by offering them an entry-level 4G smartphone. The company has announced...

Tata Sky Broadband 500 Mbps Plan With Unlimited Data Costs Rs 2,300 per Month

  Tata Sky has been growing its broadband business quite aggressively over the last few years. Tata Sky Broadband now...