Discussions between Vodafone and Idea Cellular have concluded with a deal agreed to merge the two businesses. While Vodafone will take a greater stake in the combined business, mechanisms are in place to equalise shareholdings over the next four to nine years.
- Vodafone India was independently valued at INR828 billion ($12.4 billion) while Idea was valued at INR722 billion ($10.8 billion).
- The deal does not include holdings in Indus Towers for which Idea intends to sell off its 11.5% stake, while Vodafone will explore options for its 42% stake in Indus Towers. Both companies also intend to sell their standalone towers which include 15,400 tenancies for Idea and 15,800 tenancies for Vodafone.
- Vodafone will own 45.1% of the combined business, transferring a stake of 4.9% to Ideas parent company the Aditya Birla Group for INR39 billion in cash. Aditya Birla will then own a 26.0% stake. Ideas other shareholders will own the remaining 28.9% of the business.
- The business will be immediately deconsolidated from Vodafone and operated as a joint venture with Vodafone’s additional shareholding under restricted rights with votes exercised jointly. Aditya Birla has the right to acquire an additional 9.5% stake in the business over four years. If ownership is not equalised by that point, Vodafone will reduce its own stake to match that of Aditya Birla.