Airtel to acquire Tata's consumer mobile business for free

Tata Teleservices to merge consumer mobile business with Bharti Airtel

This had prompted Bharti Airtel to acquire the Indian business of Norway's Telenor ASA earlier this year and Vodafone Group Plc's India unit to merge with Aditya Birla Group company Idea Cellular Ltd. The business along with its around 40 million customers will be transferred on a cash free, debt-free basis for some consideration.

"Instead of closing down the consumer mobile business, which would have entailed a much higher cost and involved letting go of employees and vendors etc, we have chosen this route", Tata Group chief financial officer Saurabh Agrawal told PTI.

Earlier this year, Vodafone India and Idea Cellular agreed to merge their operations to create the country's largest telecom operator worth of more than Dollars 23 billion (roughly Rs 1,51,153 crore) with 35 per cent market share.

Bharti Airtel to further bolster its strong spectrum foot-print with the addition of 178.5 MHz spectrum (of which 71.3 MHz is liberalised) in the 850, 1800 & 2100 MHz bands.

Bharti Airtel chairman Sunil Bharti Mittal said this is a significant development toward further consolidation in the Indian mobile industry.

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Bharti Airtlel Ltd, India's largest mobile-phone operator, has agreed to acquire the consumer telecom business of the diversified Tata Group, the companies said in a joint statement. The agreement will further strengthen Airtel's solid portfolio and create substantial long term value for our shareholders given the significant synergies. Tata employees will be demerged on the lines of the two businesses CMB and EFL (Enterprise and Fixed Line and Broadband), and will be moved after an optimal manpower planning. "We have evaluated multiple options and are pleased to have this agreement with Bharti".

Tata is also in initial stages of exploring combination of its enterprise business with Tata Communications and its Retail Fixed Line and Broadband business with Tata Sky.

The Boards of Bharti Airtel, Tata Sons, TTSL and TTML have approved the transaction.

This merger, which is subject to regulatory approvals, is being done on "debt-free cash-free basis", with all past dues and liabilities to be settled by Tata.

Tata will retain its stake in tower company Viom, and will take care of the liabilities associated with it, according to the statement. Goldman Sachs (India) Securities Private Limited is the financial advisor to Tata.

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