The government today gave final approval to the mega merger of Vodafone and Idea Cellular which will create the country’s largest mobile operator with 35 per cent market share and around 430 million subscribers, news agency PTI reported.
The move comes just days after Idea Cellular and Vodafone India made a joint payment of Rs 7,268.78 crore ‘under protest’ to the Department of Telecom (DoT) for merging their mobile businesses.
A senior DoT official privy to the development told PTI, that the final approval has been accorded to the merger today and the entities will now approach Registrar of Companies (RoC) for stipulated filings for approval, completing the last leg of formalities.
Vodafone-Idea merger: Govt gives final nod, entity to become India’s largest operator
DoT gave conditional nod to the merger on July 9 and asked the two firms to meet the demand raised for taking the merger on record.
In 2015, Vodafone had merged its four subsidiaries Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services, which is now called Vodafone India.
DoT at that time has asked Vodafone to clear OTSC dues worth Rs 6,678 core but the company challenged it in court. Following Supreme Court order, Vodafone had paid only Rs 2,000 crore to get the deal cleared.
In June, Idea Cellular had announced that the Telecom Department has approved raising the foreign direct investment limit in the company to 100 per cent, putting its merger deal with Vodafone in the last leg of regulatory clearance.
“Idea Cellular has received approval on its application to increase Foreign Direct Investment (FDI) limit in the company to 100 per cent, from the current 67.5 per cent, from the Department of Telecom (DoT) today,” Idea had said in a statement on June 4.
The approval is for total foreign investment up to 100 per cent in Idea Cellular Ltd, and total indirect FDI in its relevant subsidiaries Aditya Birla Telecom Ltd and Idea Cellular Infrastructure Services Ltd, it had then said.
The FDI approval came as a major milestone in the merger process of Vodafone India with Idea Cellular, and follows other statutory approvals received from Sebi, NSE, BSE, CCI and NCLT Mumbai and NCLT Ahmedabad.
Vodafone will own 45.1 per cent in the combined entity, while Aditya Birla Group would have 26 per cent and Idea shareholders 28.9 per cent.
The merged entity would be known as ‘Vodafone Idea Ltd’.