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Vodafone in Indian merger talks
Vodafone in Indian merger talks

Vodafone in Indian merger talks

SERVICES NEWS

bdlive.co.za - Feb 1st 2017, 11:44

Mumbai/London — Vodafone Group is in discussions to merge its Indian unit with Idea Cellular in a deal that would create the country’s biggest cellular carrier and ease a worsening headache for CEO Vittorio Colao. 

The talks with Idea controlling holder Aditya Birla Group could lead to Vodafone splitting off its Indian business into a separate entity, Vodafone said on Monday, Aditya Birla and Vodafone would have equal rights in the new company, Idea said.

Idea rose as much as 29%, the most since the shares began trading in 2007, bringing the company’s market value to more than $5bn. Vodafone shares gained as much as 4.1%.

The all-stock deal would reduce Vodafone’s exposure to its troubled Indian business after the carrier was forced to pump more than $7bn into the unit and write down its value by more than $5bn.

Carriers in India are seeking to consolidate after Reliance Jio Infocomm, controlled by billionaire Mukesh Ambani, India’s richest man, introduced free services undermining revenue.

"India needs consolidation — there’s just way too many operators there and that’s prevented any of them from ever making the kinds of money that they’d hoped for," said Allan Nichols, an analyst at Morningstar in Amsterdam.

A deal was not certain, nor were the terms or timing of any transaction, Newbury, UK-based Vodafone said.

Vodafone’s Indian unit is the second-largest carrier in India and Idea the third. A merger would create an operator with 387-million subscribers, a 36% market share and airwaves for faster 4G services.© BusinessLIVE MMXVII 

Read more about: vodafone group | vodafone | services

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