Shares in Vodafone rose around 3 per cent on Monday after the company confirmed that it is considering merging its Indian business with the country’s Idea Cellular phone company— a deal that if completed would create India’s biggest telecommunications group.
In a statement in response to media speculation on Monday, Vodafone said that it is in discussions with Aditya Birla Group—the conglomerate which owns Idea—about an all-share merger of Vodafone India and Idea.
“Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India,” the FTSE 100 constituent wrote in a regulatory filing. It added that there is no certainty that any transaction will be agreed.
Idea currently serves over 180 million subscribers making it the third largest operator in India, according to Aditya Birla Group. It’s the sixth largest operator in the world by subscriber numbers, based on its single country operations, and records over 2 billion minutes of conversation daily.
Vodafone India, which started operating in 2007, says that it currently has around 200 million customers.
India has recently proved a difficult market for Vodafone.
Last year it had to write down the value of its business in the country by €6.3bn amid a bitter price war there.
As a result, Vodafone said its loss after tax soared to €5.1bn in the six months to 30 September, double its net loss of €2.5bn a year earlier.
Stripping out the exceptional hit from India as well as interest payments, Vodafone posted pre-tax profit of €7.9bn for the first half, a drop of 1.7 per cent compared with one year earlier.
The company is due to publish results for the quarter to the end of December on 2 February.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies