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

A man casts silhouette onto an electronic screen displaying logo of Vodafone India. Vodafone Group will merge its Indian subsidiary with local rival Idea Cellular within two years.

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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 move came in the face of stiff competition after the launch of Reliance Jio.

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.

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