Vodafone India’s merger with Idea Cellular

Britain’s Vodafone Group will merge its Indian subsidiary with local rival Idea Cellular within two years, creating a new market leader better able to contest a brutal new price war.

Vodafone will own 45.1% of the merged entity, after it transfers about 4.9% to promoters of Idea and/or their affiliates for Rs 38.74 billion ($592.15 million) in cash, Idea said.

The combined Vodafone-Idea group would India’s largest telecom operation with almost 400 million customers, or 35% market share.

The merger comes after India’s mobile industry was thrown into turmoil with the launch last year of Reliance Jio Infocomm, the new 4G mobile broadband network built at a cost of more than $20 billion by India’s richest businessman, Mukesh Ambani, as part of his Reliance Industries conglomerate.

Idea Cellular is listed on the Indian Stock Exchanges. Following completion of the transaction, Vodafone will own 45.1% and the Aditya Birla Group will own 26.0% of the combined company. Vodafone and Aditya Birla will have joint control of the combined company under a shareholders’ agreement.

The transaction is subject to regulatory approvals and other customary closing conditions, and is expected to close during the 2018 calendar year.

Slaughter and May is advising Vodafone on the deal with a Corporate and Commercial team led by Roland Turnill (partner) and Susannah Macknay (partner, in picture), assisted by Claire Jackson (associate), James Cook (associate); David McKendrick-Ness (associate); on Competition is advising Claire Jeffs (partner), Will Turtle (partner), Ying Wu (associate), Sam Buchdahl (associate); on Tax matters is advising Mike Lane (partner), James Hume (associate); and on IP/IT law is advising Duncan Blaikie (associate), Nikhil Shah (associate), Michaela Peck (associate).

S&R Associates is advising Vodafone with a team led by Rajat Sethi and Tanya Aggarwal.

Involved fees earner: Roland Turnill – Slaughter and May; Susannah Macknay – Slaughter and May; Claire Jackson – Slaughter and May; James Cook – Slaughter and May; David McKendrick-Ness – Slaughter and May; Claire Jeffs – Slaughter and May; Will Turtle – Slaughter and May; Ying Wu – Slaughter and May; Sam Buchdahl – Slaughter and May; Mike Lane – Slaughter and May; James Hume – Slaughter and May; Duncan Blaikie – Slaughter and May; Michaela Peck – Slaughter and May; Nikhil Shah – Slaughter and May;

Law Firms: Slaughter and May;

Clients: Vodafone;