Kumar Mangalam Birla owned Idea Cellular said its Board has approved of a merger with Vodafone India and its wholly owned subsidiary Vodafone India Mobile Services, which will create India's largest mobile phone company.
Vodafone India's business barring its investments in Indus Towers will vest in the new entity, which will be renamed at a later stage, a statement by the company on BSE said.
Vodafone will own 45.1% in the combined entity after transferring 4.9% to the promoters of Idea Cellular for Rs 38740 crore in cash post the merger.
Kumar Mangalam Birla and other promoters of Idea Group will hold 26% and the rest will be owned by the public, said the statement.
The merger should be completed in 2018. Promoters of Idea and Vodafone will have the right to nominate three directors each.
Idea will have its nominee as chairman while CFO will be put forth from Vodafone's side. Both CEO and COO will be a joint decision taken by both parties, said the statement.
The Vodafone Idea alliance will create the largest telco in the country dethroning Sunil Mittal's Bharti Airtel from the top spot.