Jan 30, 2017
Vodafone seeks Idea answer to Indian woes
Following weeks of speculation in the Indian press, Vodafone confirmed on Monday that it was in early-stage talks with Idea Cellular over a deal to create one of the world's largest telecoms networks with almost 390m subscribers. Vodafone and Idea, the second- and third-largest mobile networks in India, have been long tipped by analysts as the most likely partners amid broader takeover talk throughout the telecoms market. Vodafone has the larger operation, with earnings before interest, tax, depreciation and amortisation expected to reach about €1.8bn this year, according to Exane BNP Paribas, against the €1.6bn forecast to be generated by Idea. Vodafone is likely to receive an equalising payment from Idea to balance shareholdings, according to executives. Idea carries €6.7bn of debt on its balance sheet and the merger would allow Vodafone to transfer a similar amount from group level to the new company, according to analysts at BNP. Without a controlling stake, Vodafone can deconsolidate the Indian unit from its group accounts.
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