Kumar Mangalam Birla may head Vodafone-Idea merged entity: Report
If the proposed merger of Vodafone India Ltd and Idea Cellular Ltd comes through, Aditya Birla Group chairman Kumar Mangalam Birla could become the chairman of the merged entity, the Mint reported on Thursday.business Updated: Feb 09, 2017 07:25 IST
If the proposed merger of Vodafone India Ltd and Idea Cellular Ltd comes through, Aditya Birla Group chairman Kumar Mangalam Birla could become the chairman of the merged entity, the Mint reported on Thursday.
The newspaper quoted two people familiar with the negotiations between the two mobile phone services companies as saying that the merged entity would likely have 12 directors on its board—three from either side and six independent ones. There was no official word on it, however. A spokesperson for the Aditya Birla Group said that any talk of appointments is premature.
After months of speculation, Vodafone confirmed last Monday that it was in merger talks with Idea. The proposed merger of Vodafone India and Idea Cellular will create the nation’s largest telecom firm with combined revenue of Rs78,000 crore and a 43% share of the market hitherto dominated by Bharti Airtel Ltd, which reported annual revenue of Rs50,008 crore from local telecom operations in the last financial year.
The consolidation has been triggered partly by the entry of Reliance Jio Infocomm Ltd, which has invested a staggering $25 billion (about Rs1.5 trillion) and launched its operations last September by offering free voice and data services till 31 March.
The idea of Birla as the chairman of the merged entity may help Vodafone Group make a case that it has spun off or deconsolidated its subsidiary Vodafone India, the Mint report added. “Vodafone can’t be seen as having greater control in the merged entity.” To do this under the International Financial Reporting Standards (IFRS), “a company has to demonstrate that it no longer has operating or management control in the subsidiary”, said Charanjit Attra, partner, SR Batliboi and Associates Llp. Vodafone Group will have to prove this to its statutory auditors, the first person said.
Full report | Kumar Mangalam Birla may head Vodafone and Idea combine