Britain's Vodafone Group will merge its Indian subsidiary with local rival Idea Cellular within two years, Idea said on Monday.
Vodafone will own 45.1 percent of the merged entity, after it transfers about 4.9 percent to promoters of Idea and/or their affiliates for 38.74 billion rupees ($592.15 million) in cash, Idea said.
Idea will have the sole right to appoint the chairman
Shares in Idea rose as much as 14.25 percent immediately after the merger news but gave up gains to be trading up 3.8 percent at 0355 GMT.
The merger was necessitated by the launch of Mukesh Ambani-owned Reliance Jio Infocomm that has shaken the Indian wireless telephony market with its low rates.
Jio has made an immediate impact with the launch of free calls and cut-price data, forcing the three biggest operators — Bharti Airtel, Vodafone and Idea — to slash prices and accept lower profits.
With inputs from Agencies
With inputs from Agencies