KUALA LUMPUR: Reuters has reported that Britain's Vodafone Group will merge its Indian subsidiary with local rival, Idea Cellular, within two years.
Axiata Group Bhd holds a 20 per cent stake in India-based Idea Cellular and the Malaysian telco giant has been reported numerous times in the media as wanting to sell its stake in Idea.
"Vodafone will own 45.1 per cent of the merged entity after it transfers about 4.9 per cent to promoters of Idea and/or their affiliates for US$592.15 million in cash," Reuters reported, adding that Idea will have the sole right to appoint the chairman.
This follows earlier reports in the Indian press that British telecom operator Vodafone Group Plc is in talks to merge its India unit with local rival Idea Cellular Ltd.
On Jan 30 this year, both companies issued statements confirming that they were in discussions for an all-stock merger, but both were non-committal at the time and said that there was no certainty of a transaction at that time.
Vodafone and Idea are currently the second and third largest mobile telecommunications giants in India, and the merger will result in the creation of India's largest telecoms operator.
Newswire service AFP also confirmed news of the merger, saying that Vodafone and Idea Cellular today announced that they have reached an agreement to combine their operations in India via a statement to the Bombay Stock Exchange.
Requests for comment from Axiata on the deal were not entertained as of 12.30pm.