Idea Cellular today (Monday) announced that its board has approved the merger of the company with Vodafone India to form the country’s largest telecom company. While the Aditya Birla Group owns 42.2 per cent of Idea, Vodafone India is a wholly-owned unit of British telecom giant Vodafone Group Plc.

According to MoneyControl, Vodafone and Idea will hold 45 per cent and 26 per cent stakes respectively. AB Group will buy 9.5 per cent stake at Rs 130 per share.

“Vodafone will own 45.1 per cent of the combined company after transferring 4.9 per cent to Idea's promoters or its affiliates for Rs 38.74 lakh crore in cash concurrent... Idea promoters will hold 26.1 per cent of the company and the balance will be held by public,” according to the BSE filing.

The merger will be executed by issuing new shares in Idea to Vodafone. The agreement calls for the merger to be completed within 24 months.

According to a CLSA report released in January, the new company will likely have over Rs 80,000 crore in revenue. The merged entity will account for over 40 per cent active subscriber base and will hold 25 per cent of allocated spectrum.

This merger will intensify competition in India’s highly-contested telecom space that Reliance’s Jio is fast capturing through free voice and data services.

“The combined company will have the scale required to ensure sustainable consumer choice in a competitive market and to expand new technologies that have the potential to transform daily life for every Indian,” Vodafone Group Plc chief executive officer, Vittorio Colao, has said.

Also Read: Vodafone-Idea Merger: Why It Makes No Sense For The Birlas To Seek Parity