Vodafone on its part has declined to comment on this news, Idea Cellular has called it "false and baseless".
In what could be the biggest deal in a long time in the telecom space, Idea Cellular and Vodafone are in ‘exploratory’ talks for a possible merger, reported CNBC-TV 18. While Vodafone on its part has declined to comment on this news, Idea Cellular has called it “false and baseless”. According to the channel’s report, the two telecom giants are exploring options for a strategic deal and if it does come through then it would create India’s largest telecom company in terms of market share. “Vodafone has been talking of a $11 billion IPO and Idea Cellular is reported to be valued at around $5 billion. If the two companies do come together then it will create a telecom entity with a market cap of over $16 billion,” the channel said. It would also mean that Vodafone would then not need to come out with an IPO, since Idea Cellular is already listed.
KM Birla, whose group owns Idea Cellular, has in the past said that the next two years will be challenging for the company and the telecom space as a whole. The report suggests that Idea and Vodafone have evaluated options circle by circle, to ponder on the likely impact, if the deal talks actually go through. Since the combined company would have a market share of over 50% in at least circles, the deal is subject to very complicated regulatory approvals. Vodafone has in the past been in merger talks with other companies as well, such as Tata Teleservices, but any deal has failed to materialise. The channel also suggested that Vodafone has discussed merger with Idea in the past as well.
The news of a possible merger between Idea and Vodafone comes at a time when the telecom sector is witnessing a raging war over the entry of Mukesh Ambani-led Reliance Industries’ Jio.