Shareholders of telecom operator Idea Cellular have approved the scheme relating to the merger
of its mobile business with Vodafone India, a regulatory filing showed. Over 99 percent of Idea shareholders voted in favour of the merger at the shareholders' meeting on October 12, 2017, the filing by the Aditya Birla group firm stated Friday.
Both telcos have approached the National Company Law Tribunal (NCLT) seeking its nod. In the next step, they need a final approval from the Department of Telecom. The meeting of the Idea shareholders was convened after directions of the NCLT.
Earlier this year, Vodafone India and Idea Cellular had agreed to merge their operations to create the country's largest telecom operator worth of more than $23 billion with a 35 percent market share. The combined entity of Vodafone India and Idea Cellular, which are currently India's number 2 and 3, respectively, would dislodge Bharti Airtel to counter the fierce price war in the world's second-largest telecom market.
The deal gives Vodafone India an implied enterprise value of Rs. 82,800 crores and Idea Rs. 72,200 crores. Post completion of the deal, the British firm will own 45.1 percent stake in the merged entity while the Aditya Birla group, Idea's parent, will have 26 percent after paying Rs 3,874 crore cash for a 4.9 percent stake.
The remaining 28.9 percent will be held by other shareholders. Stock of Idea traded at Rs. 79.45, up 6.64 percent from its previous close, in the afternoon session.