Presentation on

merger between
Idea and
Vodafone India

PREPARED BY:-DALJEET kumar

WHAT IS MERGER
A merger is a deal to unite two existing companies into
one new company. There are several types of mergers
and also several reasons why companies complete
mergers. Most mergers unite two existing companies
into one newly named company. Mergers are commonly
done to expand a company’s reach, expand into
new segments, or gain market share. All of these are
done to please shareholders and create value.
Background – Vodafone
India(Voice Data Fone)
Vodafone India is the second largest mobile network
operator in India by subscriber base, after Airtel with a
market share of 18.42%.It is headquartered in Mumbai,
Maharashtra. It has approximately 200 million customers
as of August 2016.
CEO: Sunil Sood (1 Apr 2015–)
Headquarters: Mumbai
Revenue: 425 billion INR (US$6.3 billion, 2015)
Founded: 1994
Parent organization: Vodafone
Subsidiaries: Vodafone Mobile Services Limited, more
Background– Idea cellular
Idea Cellular is an Indian mobile network operator based in
Mumbai, Maharashtra. Idea is a pan-India integrated GSM operator
offering 2G,3G and 4G mobile services. Idea is India’s third largest
mobile operator by subscriber base.
Customer service: 12345
Stock price: IDEA (NSE)₹ 90.65 -0.95 (-1.04%)
24 Mar, 3:53 PM IST - Disclaimer
CEO: Himanshu Kapania (1 Apr 2011–)
Headquarters: Santacruz, Mumbai
Founded: 1995
Revenue: 354 billion INR (2016, US$5.3 billion)
Parent organizations: Aditya Birla Group, Axiata, Providence
Equity Partners
Founders: Aditya Vikram Kumar Mangalam Birla, Ghanshyam
Das Birla
 Merger details
• On 20 march 2017,Vodafone India and idea cellular agreed to
merge and create a biggest telecom company in India with a
customer base of over 394 millions.

• Vodafone India own 45.1 % entity after transferring 4.95 to the

promoters of idea cellular for Rs of 3874 crore in cash post the
merger. The promoter of idea group will hold 26% and the rest of
shares will be owned by public so we can say that it is an 50 50
partnership.

• Through this merger both of companies became the countries

largest players with a revenue of market share of 43% leaving
Bharti Airtel in the second slot with a share of 33%.
 Need of Merger
• The need of merger arises to get full benefit of the synergy and
with synergy benefit it results in higher profits and leverage
expected to reduced, the combined entity's equity valuation also
rises.
• Also the market share and the number of customers also
increased through this mergers which ultimately provide boost
in the revenue of both of the firms.
• It also helps in reducing the effect of tariff war that generally
occurs in the Telco market.
• Also with this merger both company enjoy benefits in term of
network and also in terms of services.
• To became biggest Telco sector in India this merger is required
 Effects from merger
• Accordingly, experts believe Vodafone India and Idea's attempts
to unlock synergies across 22 circles amid a bruising price war
with 4G networks not yet up to market expectations could have
limited success.

The Vodafone-Idea merged entity expects to extract synergy

benefits worth $10 billion in net present value (NPV) terms
after integration of costs and spectrum liberalization payments
and an estimated $2.1 billion of savings by the fourth year of
completion.

• Aggressive entry of reliance jio has launched big price war.

With its free services,jio has upset the bigger players. The
Vodafone idea merged entity will only add fuel to the fire.
 Cnt……….
• Overall consolidation in the debt-ridden telecom industry will
lead to better financial healthy and sustainability of companies.
Since consolidation will leave only three big companies in
industry, there will be less competition and bigger revenue.

• Vodafone idea merger will result in duplication of resources

across the country which require job cuts too.

• The Vodafone idea merger in telecom sector will lead to pooling

of vital resources and infrastructure, which will inevitably lead
to better service quality and customer experience.
Benefits for customers

• The chances of better services is more

• Customer as a king in market due to impact on tariff prices

• Chances of better and faster network is more.

• Also both of the companies starts working on better coverage of

4G and 5G ,Which ultimately grew the future expectation of
customers.