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Vodafone has agreed to sell 9.5 per cent additional stake to Aditya Birla Group for Rs 130 per share after they merge their telecom operations to create the country's largest operator worth more than $23 billion.
Aditya Birla Group has filed with the BSE the composite scheme of amalgamation between Vodafone and Idea Cellular, which stated that the merged entity shall be under the joint control of the two firms and will be governed by the shareholders' agreement.
The remaining 28.9 per cent will be held by other shareholders.
The combined entity of Vodafone and Idea Cellular, which are India's number 2 and 3 mobile players, respectively, will overtake Bharti Airtel and would be in a better position to take on a raging price war unleashed by newcomer Reliance Jio in the world's second-largest market.
The new company, which will come into being over the next two years, will be headed by Kumar Mangalam Birla, while Vodafone will have the right to appoint chief financial officer.
The CEO and the chief operating officer will be appointed with the approval of both companies. The two firms will have three nominees each on the board of the new entity, the scheme said.
Vodafone-Idea is the second merger in the sector to be announced this year. In February, Bharti Airtel unveiled plans to buy the Indian business of the Norway-based Telenor.
The merged venture will create India's largest mobile operator with almost 400 million users and a 35 per cent market share by customers. The deal gives Vodafone India an implied enterprise value of Rs 82,800 crore and Idea an enterprise value of Rs 72,200 crore.