Idea Cellular, an Aditya Birla Group company, along with Telecom Malaysia International (TMI) announced the acquisition of 40.8 per cent stake in Spice Communications Limited (Spice) at a price of Rs. 77.30 per share. TMI is an emerging leader in Asian telecommunications with over 44 million subscribers and a presence in 10 countries. The operational synergies emerging out of this merger would augur well for both the telecom players. The acquisition of Spice gives Idea the much needed headway inPunjab and Karnataka states that account for more than 10 per cent ofIndia’s wireless subscribers. The entire process of the merger between both the companies would take six to eight months to complete. Post merger, Idea is looking at a pan-India presence. The deal also gives Idea the opportunity to leverage. Idea Cellular, the leading GSM mobile services operator has licenses to operate in all 22 service areas ofIndiawith commercial operations in 11 service areas. With a customer base of over 26 million, it runs operations in Delhi, Himachal Pradesh, Rajasthan, Haryana, Uttar Pradesh (East), Uttar Pradesh (West) & Uttaranchal, Madhya Pradesh & Chattisgarh, Gujarat, Maharashtra & Goa, Andhra Pradesh, and Kerala, holds spectrum for Mumbai, Bihar, Orissa, Tamil Nadu (including Chennai), and Karnataka, and licenses for the remaining six service areas. With the planned launch of services in Mumbai,Biharand Jharkhand, Orissa and Tamil Nadu (including Chennai) towards the end of the calendar year, Idea’s footprint will soon cover approximately 90 per cent ofIndia’s telephony potential. Idea has acquired Spice Telecom and the deal consists of 4 transactions:
- Idea will acquire the Modi’s 40.8% stake in Spice (for Rs 2,720 crore).
- Idea will launch the mandatory 20% open offer for the Spice shareholders, jointly with Telecom Malaysia International (TMI).
- Idea will merge Spice with itself and offer a 14.99% stake to TMI through a preferential allotment.
- The Idea-TM combine will launch the open offer at Rs 77.30 jointly with TMI, which now holds 39.2%in Spice
The official brand name has been changed from Spice to Idea in these circles w.e.f. 19th December 2008.
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