In the biggest consolidation deal in India’s telecom sector, Reliance Communications and Aircel announced the merger of their wireless operations to create a combined entity with assets worth Rs 65,000 crore.
RCom and Maxis Communications Berhad (MCB) hold 50 per cent each in the merged entity with equal representation on the board and committees.The transaction will reduce RCom’s debt by Rs 20,000 crore ($3 billion), while Aircel’s debt would go down by Rs 4,000 crore ($ 600 million) on closing in 2017, the two companies said.
The merger will create India’s fourth largest telecom operator by customer base and revenues. The merged entity will have the second-largest spectrum holding among all operators, aggregating 448 MHz across 850, 900, 1800 and 2100 MHz bands.The entity will have assets of Rs 65,000 crore ($9.7 billion) and net worth of Rs 35,000 crore ($5.2 billion).
“Together with our partners, MCB, we are delighted to have taken the lead in consolidation of the Indian telecom sector, first, with RCom’s acquisition of the wireless business of SSTL (Sistema/MTS), and now, with the combination of our business with Aircel in a 50:50 joint venture with MCB,” Reliance Group Chairman Anil Ambani said.
