Today British Telecom Company Vodafone confirms that they were in talks for merger with competitor Idea Cellular. Vodafone India would make an all-share deal with Idea so that the new group can handle the competition in telecom market in India.
Vodafone was in talks with Aditya Birla, owner of Idea Cellular. If the deal happens, Idea would issue new shares to Vodafone and it would result in Vodafone deconsolidating Vodafone India.
So after this news, today in early trading, Vodafone shares were up 3.5 percent.
In a statement, Vodafone said, “confirms that it is in discussions with the Aditya Birla Group about an all share merger of Vodafone India and Idea. Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India.”
However, the company added that there was no certainty that any transaction would be agreed upon, “nor as to the terms or timing of any transaction”
Mukesh Ambani’s Reliance Jio is the reason behind this big merger. As with the entry in market, Reliance Jio affected all telecom giants very badly. Reliance Jio was offering free unlimited calling and data for three months. Now they increased the validity till 31st March 2017.
Reliance Jio affected all Vodafone, Idea, Airtel and other Telecom service providers. If Vodafone Idea merger happens, it would be number one Telecom Company by subscribers and revenue market share.
Currently Sunil Mittal’s Bharti Airtel is the leading Company in India with most subscribers and revenue.
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