In what is considered to be the biggest consolidation deal in India s telecom sector, Reliance Communications and Aircel have announced the merger of their wireless operations. The merger between the two companies will create a combined entity with assets worth Rs 65,000 crore. In the merger, Reliance Communication and Maxis Communications Berhad (MCB) have a holding of 50 percent each in the entity with equal representation on the board and committees. The transaction is said to reduce RCom s liability by Rs 20,000 crore which is approximately $3 billion. Talking about Aircel, the company s debt would go down by Rs 4,000 crore, which is close to $600 million. Also Read - RCom concludes sale of 'media nodes' to Reliance Jio for Rs 2,000 croreAlso Read - Mobile phone customer base in India reduces by over 58 million in April 2018
The combined entity will have assets of Rs 65,000 crore and net worth of Rs 35,000 crore. The merger will make the entity India s fourth largest telecom operator by customer base and revenues. The entity will also have the second-largest spectrum holding among all operators, aggregating 448 MHz across 850, 900, 1800 and 2100 MHz bands. Together with our partners, MCB, 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 (Sistema/MTS), and now, with the combination of our business with Aircel in a 50:50 joint venture with MCB, Reliance Group Chairman Anil Ambani said. Also Read - RCom group head count falls 94% to 3,400 people
This combination is expected to create substantial long term value for shareholders of both, RCom and MCB, given the benefits of the wide-ranging spectrum portfolio and significant revenue and cost synergies, he added. This deal further reinforces MCB s commitment to India. Since acquiring Aircel in 2006, MCB has invested in excess of Rs 35,000 crore ($5.2 billion) into Aircel, making this one of the largest foreign investments into India, not only in the telecom industry but across all sectors, MCB said. ALSO READ: Reliance Communications introduces 4G app-to-app calling offer
RCom will continue to own and operate its high growth businesses in the domestic and global enterprise space, data centres, optic fibre and related telecom infrastructure, besides owning real estate.