It’s official; Vodafone Group and Idea Cellular are in talks for a merger

Ending months of speculation, Vodafone on Monday confirmed it is in talks with the Aditya Vikram Birla group for the merger of its Indian entity and Idea Cellular in what will be the largest such deal in the country's telecom space once it materialises.

"Vodafone confirms that it is in discussions with the Aditya Birla Group about an all share merger of Vodafone India — excluding Vodafone's 42 per cent stake in Indus Towers — and Idea," the Indian entity's parent company said in a statement.

"Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India."

India’s telcos have been struggling in the wake of Reliance Jio’s launch in the country. As The Economic Times points out, India’s largest telco Airtel suffered a 55 percent fall in the third quarter profit. The impact on second place Vodafone and third place Idea can only be speculated at this time. The ET report suggests that Idea will report its “first ever net loss” and that Vodafone’ revenue would have been very badly affected.

Analysts reportedly believe that given its current predicament, a merger is the only option that Vodafone has left.

With inputs from IANS

Disclaimer: Reliance Jio is owned by Reliance Industries, who also own Network18, the publisher of Firstpost and Tech2.

Published Date: Jan 30, 2017 14:49 PM | Updated Date: Jan 30, 2017 14:49 PM