Axiata: We'll study impact of Idea Cellular-Vodafone India merger

PETALING JAYA: Axiata Group Bhd said it is analysing all potential impact from the proposed merger between its 19.8%-owned Idea Cellular Ltd and Vodafone India, a unit of Britain's Vodafone Group Plc.
“Axiata has been a significant and strategic shareholder in Idea for the last nine years. As always, Axiata will ensure that the position of its shareholders are best addressed through among others, any industry consolidation or development,” it said in a filing with Bursa Malaysia Securities yesterday.
Axiata added that it will ensure that its investment position in Idea is maximised in terms of value and liquidity.
Axiata shares rose 11 sen or 2.21% to close at RM5.08 yesterday.
AFP reports: British mobile phone giant Vodafone will merge its Indian unit with Idea Cellular to create India's largest telecoms operator, the firms said in Mumbai yesterday, as they combine to fight a price war sparked by the country's richest man.
The confirmation ended months of speculation that the two operators were ready to sign a deal to help fend off the Mukesh Ambani-backed Reliance Jio, whose recent arrival has shaken up India's ultra-competitive mobile network market.
"Vodafone Group Plc and Idea Cellular today announced that they have reached an agreement to combine their operations in India," they said in a statement to the Bombay Stock Exchange (BSE) yesterday.
"The combined company would become the leading communications provider in India with almost 400 million customers, 35% customer market share and 41% revenue market share," the statement added.
Jio launched in September with an audacious free service for the rest of2016, followed by vastly cheaper data plans and free voice calls for life, forcing rivals to dramatically slash their tariffs.
The combined Vodafone-Idea company will overtake Bharti Airtel as India's largest network provider.
Shares in Idea initially soared following the announcement but then tanked to close down more than 9%, with reports saying investors were worried the deal undervalued Idea.
Vodafone will hold 45.1% of the merged entity after it transfers a 4.9% stake to Idea backers for 39 billion rupees (RM2.6 billion) in cash.
Idea will hold 26% in the combined company and the merger will take up to two years to complete. The agreement excludes Vodafone's 42% in Indus Towers.
The merged firm will be worth US$23.2 billion (RM100.5 billion), based on the combined enterprise value of US$12.4 billion for Vodafone India and US$10.8 billion for Idea Cellular, according to Bloomberg News.
The companies will nominate three directors each, the statement said.
Global brokerage CLSA has estimated that the tie-up would command a revenue market share of 43% by the start of the 2019-20 financial year, ahead of Airtel on 33%. Jio would have 13%.