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Jet set to buy Air Sahara for $560 million
The aviation industry is expected to witness the biggest acquisition yet when Jet Airways seals a deal to buy Air Sahara.
The Indian aviation industry is expected to witness the biggest acquisition yet when Jet Airways seals a deal to buy rival Air Sahara at an estimated cost of $560 million.
The move, expected to be finally sealed after deliberations between Jet's chief Naresh Goyal and Air Sahara's Subroto Roy slated for later Wednesday in Mumbai, will make the acquirer the largest Indian airline with a fleet of 90 aircraft.
"We may make a statement in the evening," a Sahara official said.
Jet is already the number one private airline in the country, with a 40 per cent market share in the domestic aviation sector. This would go up to more than 50 per cent after the acquisition, aviation industry sources said.
Air Sahara had said in September that it was looking at opportunities for alliances and partnerships to fund expansion and that its advisers Ernst and Young had put its enterprise value at $750 million to $1 billion.
Following this, many in the aviation industry had stepped forward to strike a deal, including Vijay Mallya's UB group that operates the Kingfisher Airlines and had pegged Air Sahara's worth at $600 million.
The proposal called for UB group paying in cash $200 upfront, the retention of stake worth another $200 million by the Air Sahara's promoters and raising the remaining by way of a public issue.
But UB was out of the race, since Sahara favoured the entire amount in cash. Jet was willing to acquire the entire company.
Sahara, which began operations just months after Jet in 1993, is part of the $12 billion Subroto Roy group and has interests spanning para-banking, finance, housing, power and media.
