India's RCom to merge with Aircel

15 Sep 2016

India's Reliance Communications has arranged to merge its mobile business with rival Aircel to create one of India's top four operators by customers and revenue.

The deal is expected to be the largest ever consolidation in the Indian telecoms sector, RCom said in a stock exchange statement.

Under the arrangement, RCom and Aircel's parent company, Malaysia's Maxis Communications, will combine their Indian mobile assets to form a 50:50 joint venture. Both RCom and Maxis will have equal board representation.

The transaction is expected to take place in 2017. Through the deal RCom expects to reduce its overall debt by around $3 billion, or over 40% of its total, while Aircel expects to cut its debt by $600 million.

The merged company will have the second largest spectrum holding among all Indian operators, with 448 MHz aggregated across the 850-MHz, 900-MHz, 1800-MHz and 2100-MHz bands. It will be a top three operator in 12 key cities.

“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, and now, with the combination of our business with Aircel in a 50:50 Joint Venture with [Maxis],” Reliance Group chairman Anil Ambani said.

Maxis commented that the company has invested over $5.2 billion in Aircel since acquiring the company in 2006, marking one of the largest foreign investments in India.

RCom's data center, fiber and related infrastructure operations will remain separate following the merger. The deal still requires shareholder and regulatory approvals.

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