Reliance Communications (RCom) share price gained as much as 4 per cent on Tuesday after the telecom service provider announced that it is in talks with shareholders of telecom operator Aircel for a potential merger of the wireless or mobile businesses of the two companies.
At 2.37 pm, the share price of Reliance Communications was up 2.63 per cent at Rs 85.90. The scrip opened at Rs 83.70 and had touched a high and low of Rs 87.10 and Rs 83.20, respectively, in trade so far.
Later, the scrip closed 2.39 per cent up at Rs 85.70.
In a BSE filing, RCom said “It has entered into a 90-day exclusivity period with Maxis Communications Berhad (MCB) and Sindya Securities and Investments Private Limited, the shareholders of Aircel Limited, to consider the potential combination of the Indian wireless businesses of RCom and Aircel.”
The objecive is to mutually derive expected substantial benefits of in-country consolidation, including operating expenditure (opex) and capital expenditure (capex) synergies and revenue enhancement.
The potential combination will exclude RCom’s towers and optical fibre infrastructure, for which RCom is proceeding with an asset sale, as announced on December 4, 2015. The discussions are non-binding in nature.
“Any transaction will be subject to due diligence, definitive documentation and regulatory, shareholders’ and other third party approvals. Hence, there is no certainty that any transaction will result,” RCom said in a BSE filing.
Reliance Communications has a customer base of over 118 million, including over 2.6 million individual overseas retail customers. The company’s corporate clientele includes over 39,000 Indian and multinational corporations including small and medium enterprises and over 290 global, regional and domestic carriers.