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The proposed merger of Air India-Vistara has reportedly been finalised. The Tata Group will have a 75 per cent stake in the merged entity, as reported by Economic Times (ET). SIA will own the remaining 25 per cent.
The merger is expected to be completed within a year and may be announced soon, the report added.
Currently, Tatas and SIA jointly own Vistara Airlines. Tatas have a 51 per cent stake in the airline and 49 per cent of it is owned by SIA. With the merger, the Tata Group wants to establish Air India as an umbrella carrier.
For this, Vistara may be merged into AI. Also, AirAsia India (AAIPL) and AI Express may be merged. But all the mergers would require clearance from several agencies including the Competition Commission of India (CCI). It might take up to 6 months, the report said.
However, the report further said that the merger may not be completed within one year. In June, the Competition and Consumer Commission of Singapore (CCCS) expressed concern over Tata Group acquiring SIA.
It said that Tata's related entities have "overlapping passenger routes" as well as "overlapping cargo routes".
One of the executives told ET in early November that SIA had agreed to become part of the merged entity because India is a key market for the carrier. "SIA has reaped benefits from Vistara and realises that the cost of scaling up Vistara will be significantly higher as compared to Air India, which already has a significant size," said the person.
In January this year, Tata group regained control of Air India after emerging as the winning bidder for the loss-making airline. It had offered a bid of Rs 18,000 crore, which comprised a cash payment of Rs 2,700 crore, and absorbing the carrier's debt worth Rs 15,300 crore.
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First Published: Thu, November 17 2022. 11:15 IST
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