Vodafone-Idea Merger Likely To Get DoT's Approval Tomorrow: Report
The much-awaited merger of Vodafone India and Idea Cellular is likely to get a go-ahead from the departmental of telecommunications (DoT) on Monday, stated media reports attributing to news agency Press Trust of India (PTI). In case the DoT's approval comes through, almost all the decks for the biggest merger in India's telecom sector will be cleared, pending furnishing of bank guarantee by Idea Cellular, reported PTI quoting unnamed sources.
Prior to this, the Vodafone-Idea merger has already been given the green signal by Competition Commission of India (CCI), markets regulator Securities Exchange Board of India (SEBI), and also by the National Companies Law Tribunal (NCLT).
Besides, the merged entity will be known as Vodafone Idea Ltd, as was announced on June 2 by Idea Cellular in a stock market filing, however, the proposal has yet to be approved in an extraordinary general meeting that will be held on June 26.
Vodafone-Idea Merger. Ten things To Know
1. Vodafone India and Idea Cellular's merged entity will be known as Vodafone Idea Ltd, subject to the approval of special resolution in an extraordinary general meeting that will be held on June 26. The meeting will also pass a resolution seeking permission to raise Rs. 15,000 crore.
2. The joint enterprise of Vodafone and Idea Cellular, currently country's number two and number three telecom companies, respectively, would unseat Bharti Airtel to grab the top slot. The merged entity is expected to be a $23 billion entity with nearly 35 per cent market share.
3. Once the deal goes through, Vodafone will own 45.1 per cent stake in the merged entity, while Idea Cellular will have a 26 per cent stake
4. On March 22, both the companies announced that Vodafone's chief operating officer Balesh Sharma will be appointed as the CEO of the merged entity.
5. For the merger, the companies first approached the approval of Competition Commission of India (CCI). On July 24, last year the CCI gave its approval to the merger of two telecom companies.
6. In May 2017, markets regulator SEBI had sought clarification over the merger of two companies.
7. On October 13 last year, shareholders of Idea Cellular gave their approval to the scheme relating to the merger of its mobile business with Vodafone India. Over 99 per cent of Idea shareholders voted in favour of the merger at the shareholders' meeting on October 12, 2017, stock exchange filing by Kumar Mangalam Birla-led Idea Cellular stated.
8. Following the shareholders' approval, the companies sought approval from the National Companies Law Tribunal (NCLT). As the NCLT approved the proposed merger, the companies are now free to approach the department of telecom for the final approval.
9. Kumar Mangalam Birla will be the non-executive chairman of the merged company. A non-executive chairman is entrusted with no operational responsibilities but only enjoys the board responsibilities, said Vodafone.
10. The existing leadership teams of Idea Cellular and Vodafone India will continue to manage their separate businesses and be accountable for each company's operational performance until the merger becomes effective.
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