Reliance Communication and Aircel merge wireless business in India
In what may be one of the biggest consolidation in the Indian telecom sector, Reliance Communication has merged with Aircel.
Reliance Communications (RCOM) and Maxis Communications Berhad (MCB), promoters of Aircel in India, have announced the signing of the merger agreement of their wireless businesses in India. MergedCo will have the second-largest spectrum holding amongst all operators, aggregating 448 MHz across the 850, 900, 1800 and 2100 MHz bands.
The RCOM-Aircel combination would create a strong operator ranked amongst India’s top 4 telcos by customer base and revenues. Further, the merger will allow for enhanced business continuity through extended validity of spectrum holdings till 2033-35.
Post the merger, RCOM and MCB will each hold a 50% stake in the merged entity (MergedCo), with equal representation on the Board of Directors and all Committees. Further, RCOM will reduce its debt by Rs. 20000 crore whereas Aircel debt would reduce by Rs. 4000 crore.
Speaking about the merger, Anil D. Ambani, Chairman, Reliance Group, said, “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 Ltd. in a 50:50 Joint Venture with MCB. We expect this combination to create substantial long term value for shareholders of both, RCOM and MCB, given the benefits of the wide-ranging spectrum portfolio and significant revenue and cost synergies.”