Vistara-Air India merger: Singapore Airlines gets FDI nod from India
India clears final hurdle for Air India's merger with Vistara, approves $276 million investment by Singapore Airlines.
India cleared the last roadblock to Air India Ltd.’s merger with smaller rival Vistara, approving a $360 million ($276 million) investment by Singapore Airlines Ltd. The deal paves the way for the operational merger of planes, staff and routes.
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Air India expects to complete the merger with Vistara by the end of the year, Singapore Airlines said in a filing. The Singaporean carrier, which jointly owns Vistara with the Tata Group, will hold a stake of about 25.1% in the enlarged Air India Group.
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The Air India-Vistara merger has been in the making for more than 18 months. Ongoing airline transactions include Alaska Air Group Inc.’s and Hawaiian Holding Inc.’s $1.9 billion merger, and Korean Air’s $1.4 billion bid for smaller rival Asiana Airlines Inc.
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The Indian merger will give Singapore Air greater exposure to one of the world’s fastest-growing travel markets and make it the only foreign player to have a significant stake in one of the country’s airlines. The deal also widens Singapore Air’s reach beyond its smaller home market, with its reliance on international travel hurting the company during the Covid-19 pandemic. The carrier has wrapped up a flurry of tie ups in recent years including joint-venture deals with neighbors Malaysia Airlines and more recently Garuda Indonesia. It is also seeking a similar pact with Japan’s All Nippon Airways.