Vodafone’s India operations to merge with Idea Cellular in two years

Britain’s Vodafone Group will merge its Indian subsidiary with local rival Idea Cellular within two years, Idea said on Monday.

Vodafone will own 45.1% of the merged entity, after it transfers about 4.9% to promoters of Idea and/or their affiliates for Rs 38.74 billion ($592.15 million) in cash, Idea said.

Idea will have the sole right to appoint the chairman.

Shares in Idea rose as much as 14.25% immediately after the merger news but gave up gains to be trading up 3.8%.

The telecom industry in India is already reduced to a four players’ game — Reliance Jio being the new one, and Bharti Airtel, Vodafone and Idea as the incumbents.

Marginal players such as Reliance Communications, Aircel and Telenor are already looking at probable consolidation.