Vodafone India has confirmed that it has reached an agreement to acquire rival Idea Cellular. The deal, which is being painted as a merger, will create India’s largest operator with some 377 million customers.
The company revealed it was in talks with Idea Cellular over a deal in January, and the coming-together was announced today. Subject to the relevant approvals, it is expected to close sometime next year.
Vodafone is taking an initial 45.1 percent stake in the combined entity, with Idea Cellular parent Aditya Birla Group holding 26 percent. The duo have arranged a schedule that will see those shareholdings equalized over time. However, if after four years both parties don’t own the same amount, Vodafone has agreed to sell down its shares to ensure parity of ownership over the following five years.
Vodafone and Idea rank second and third in India with around 200 million and 177 million customers. Post-merger, the joint entity will overtake Airtel, which claims 269 million subscribers, as things…