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Vodafone completes merger with Idea, creates India's largest mobile operator

Press Trust of India  |  New Delhi 

The merger of and has been completed, creating India's biggest telecom service provider with over 408 million subscribers, the two companies said today.

A new board has been constituted for the merged entity "Idea Ltd' with 12 directors (including six independent directors) and as its The board has appointed as the CEO, the companies said in a joint statement.

The combination will have all revenue market share of 32.2 per cent and take the numero uno slot in nine telecom circles, it said adding that both and Idea brands will continue.

The will topple from its current pole position, and will have the firepower to take on competition in the Indian telecom market, which has intensified with the aggressive entry of

It will have a network of 3.4 lakh sites and distribution network with 17

"The merger is expected to generate Rs 14,000 crore annual synergy, including opex synergies of Rs 8,400 crore, equivalent to a net present value of approximately Rs 70,000 crore," the statement said.

The net debt of the company stood at Rs 1,09,200 crore on June 30, 2018.

"The equity infusion of Rs 6,750 crore at Idea and Rs 8,600 crore at Vodafone, coupled with monetisation of standalone towers of both companies for an enterprise value of Rs 7,850 crore, provides the company a strong cash balance of over Rs 19,300 crore post payout of Rs 3,900 crore to the (DoT)," the statement said.

Moreover, it added, the company has an option to monetise over 11 per cent stake in Indus (the tower company), amounting to a cash consideration of Rs 5,100 crore.

The combination will have a wide spectrum portfolio of about 1,850 MHz, over 2 lakh mobile sites and about 2.35 lakh kms of fibre. This will allow it to offer "superior voice and connectivity across the country, covering 92 per cent of the population and reaching nearly 5,00,000 towns and villages," it said.

Kumar Mangalam Birla, and Vodafone Idea Limited said, "Today, we have created India's leading It is truly a historic moment...As Vodafone Idea, we are partnering in this initiative by building a formidable company of international repute, scale and standards".

Balesh Sharma, of the new entity said, "We are committed to offer both our retail and enterprise customers an excellent experience while fulfilling their evolving digital and connectivity needs via new products, services and solutions".

A regulatory filing by Idea said it will be renamed as Vodafone Idea Ltd, following the completion of all formalities and approvals. Post merger, the paid-up equity share capital of stands increased to Rs 8,735.13 crore.

has stepped down from the position of of with effect from August 31, 2018, but shall serve as of the new company.

Shares of Idea Cellular were trading 1.10 per cent higher at Rs 50.40 apiece on BSE.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, August 31 2018. 12:25 IST