Vodafone close to sealing £21bn Indian tie-up

Vodafone is aiming to create India's biggest operator by merging with Idea
Vodafone is aiming to create India's biggest operator by merging with Idea

Vodafone is closing in on a £21bn deal to merge its Indian operation with rival mobile operator Idea, going into business with the powerful Birla dynasty.

City sources said talks had reached an advanced stage and that an agreement could be announced this week. Delays in what has proven a complicated and delicate negotiation for Vodafone remain possible, however.

It is understood that under the deal, Vodafone and the Birla family holding company, which is Idea’s controlling shareholder, will hold equal sway over the combined company.

Sources called the structure a “face-saving” move to preserve Birla family pride – under a simpler deal they would be the junior partner in a joint venture.

Vodafone India and Idea are both worth about £5bn with the remainder of the deal value made up by debts.

Vodafone intends to deconsolidate its Indian arm from its accounts, taking its debts off the main company balance sheets.

The merger has been triggered by a mobile price war launched by India’s richest man, Mukesh Ambani.

Vodafone declined to comment.

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