Kumarmangalam Birla to Chaired Vodafone-Idea entity
Vodafone, Idea to have equal stakes in the merged entity over a period of time. The U.K.’s Vodafone and Aditya Birla group firm Idea Cellular on announced that they have kick started a mega merger deal. Vodafone will own 45.1% of the merged entity, after it transfers about 4.9% to promoters of Idea and/or their affiliates for ₹38.74 billion rupees. Idea will have the sole right to appoint the chairman. Kumarmangalam Birla will be the Chairman of merged Vodafone-Idea entity and both the companies will have equal stakes in the merged entity over a period of time. The agreement contemplates completion of proposed amalgamation with a period of 24 months.
The combined market share of both the telecos add up to 43%, making it the largest telecom firm, surpassing Bharti Airtel.
The merger will create an entity with a revenue of around ₹77,500-80,000 crores.
Amalgamation- Amalgamation is the combination of one or more companies into a new entity. An amalgamation is distinct from a merger because neither of the combining companies survives as a legal entity; a completely new entity is formed to house the combined assets and liabilities of both companies.
Promoters- A promoter is an individual or organization that helps raise money for some type of investment activity. ... Often, promoters are paid in company stock or free entrance into the investing activity though a more standard fee for service structure may also be used to dictate the level of compensation.