Vodafone has agreed to sell 9.5 percent additional stake to Aditya Birla Group for 130 per share after they merge their telecom operations. Aditya Birla Group has filed the composite scheme of amalgamation between Vodafone and Idea Cellular with the BSE, which states that the merged entity shall be under the joint control of the two firms, and will be governed by the shareholders' agreement. In the merged entity, Vodafone will hold
50 percent stake, while Aditya Birla Group will hold 21 percent. Upon completion of merger, Vodafone will transfer 4.9 percent shares of merged entity to Aditya Birla Group for 3874 crore.
Post such transfer, the AB Group shareholding will increase to 26 percent and Vodafone shareholding will reduce to 45.1 percent. The remaining
28.9 percent will be held by other shareholders. Also, AB Group will have the right to acquire more shares from Vodafone at a price of 130 per share, in order to equalize the shareholdings over 4 years. If equal shareholding is not achieved within 4 years, Vodafone will sell down its shareholding to equalize its shareholding with Aditya Birla Group over the following 5 years.
Until equalization, the voting rights on additional shares of Vodafone shall be exercised jointly by Vodafone and Aditya Birla Group. The merger excludes Vodafone's 42 percent stake in Indus Towers, and will be effected through issuing new shares in Idea to Vodafone, which will result in Vodafone deconsolidating Vodafone India. This mechanism will facilitate reducing Vodafone Group net debt by 55,200 crore and lowering Vodafone Group leverage by around 0.3× net debt/EBITDA.