Bharti Airtel, Tata Tele say merger complete; Department of Telecommunication yet to formally clear

Tata Teleservices (TTSL) and its unit on Monday completed the merger of their consumer business with that of Bharti Airtel and unit Bharti Hexacom, nearly two years after the announcement, transferring their assets, spectrum and some related debt to the Sunil Mittal-promoted carrier and concluding what was the last big-ticket M&A in the stressed sector.

“Following the Hon’ble TDSAT’s order directing the DoT (Department of Telecommunications) to take the merger on record and approval of the schemes of arrangement by Hon’ble NCLT, Delhi and Hon’ble NCLT, Mumbai, we are pleased to announce that the schemes of arrangement have become effective today July 1, 2019,” the two sides said in a joint statement Monday.

“Consequently, all customers, assets, spectrum and agreed liabilities of the Consumer Mobile Businesses of TTSL and TTML (Tata Teleservices Maharashtra Ltd.) now stand merged with Airtel,” they added.

In a separate notice to the stock exchanges Monday, TTML – the listed unit of TTSL – said that its shareholders will get one equity share of Airtel in exchange for 2,014 of the Tata Group company’s shares on the record date of July 12.

Also, investors holding fully paid-up, redeemable preference shares of TTML will get 10 paid-up redeemable, non-participating, non-cumulative preference shares of face value Rs 100 of Airtel, “in proportion to their holding” on the record date, the company added.
The Airtel stock closed 0.5% higher at Rs348.50 on the BSE Monday, while shares in TTML gained 2.7% to end at Rs3.79.
The merger, through which Airtel gets coveted 4G spectrum to take on Reliance Jio, and allows the Tata Group to shed its loss-making wireless telephony business which was a drag on group financials for several years, was first announced in October 2017. TTSL and TTML now will only operate landline services which does not need airwaves, people familiar with the matter said.

The completion of the deal comes about two months after the telecom tribunal in May allowed them to ‘operationalize the spectrum and undertake other consequential activities’, after partially staying DoT’s demand for about Rs 8,300 crore in bank guarantees in one-time spectrum charges (OTSC). The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) asked DoT to take on record the merger, but asked Airtel to submit half of the Rs 1,287.97 crore demand raised by the government as OTSC for Chennai circle license extension, which the operator paid up last month.

But, the DoT is still to formally clear the deal with sources saying the government is considering challenging the TDSAT order in the Supreme Court.

But as things stand, Airtel has begun using TTSL’s airwaves from July 1. It though has got less than half of the airwaves and only a fraction of the carrier’s customer base, compared with what was announced back in 2017.

The Sunil Mittal-led telco will now get an additional 71.25 Mhz of liberalized spectrum in three 4G bands—1800 MHz, 2100 MHz and 850 MHz— from TTSL as opposed to 178.5 MHz which the carrier had two years ago. Airwaves in these bands are widely used for 4G, an area where Airtel is expanding fast to keep pace with Jio.

Company insiders said the companies have surrendered to the government 107.25 Mhz of non-auctioned airwaves, of which 66 Mhz was in the 1800 Mhz band and 40 Mhz in the 800 Mhz band. TTSL was expected to keep some part of the spectrum for enterprise services but has decided against it.

Airtel will also get only a miniscule part of the 40 million customers TTSL had back in October 2017. As per data from the telecom regulator, TTSL had 13 million customers as of April, but less than 1% of them were active.

GSK Consumers Healthcare gets shareholders’ approval for merger with HUL

GSK Consumers Healthcare Ltd said Sunday that its shareholders approved its proposed merger with FMCG major HUL.

The company has received 99.99 per cent votes in favour of the scheme of amalgamation among the company and Hindustan Unilever Ltd (HUL) in the National Company Law Tribunal-convened meeting of the equity shareholders on June 1, 2019.

“The proposed resolution approving the Scheme was passed by the requisite majority of the equity shareholders of the Company,” said GSK Consumers in a BSE filing.

Earlier in January, GlaxoSmithKline Consumer Healthcare had informed that it has received approval from the fair trade regulator CCI for its merger deal with HUL.

On December 3, 2018, Anglo-Dutch FMCG giant Unilever had announced the acquisition of health food portfolio, including popular brands Horlicks and Boost, from GlaxoSmithKline in India and over 20 other markets for 3.1 billion pounds (about ? 27,750 crore).

Under the deal, Unilever’s Indian arm, HUL is acquiring GSK CH India via an all-equity merger, valuing the total business of the latter at Rs 31,700 crore.

GSK CH India is the market leader in the health food drinks (HFD) category, with popular brands such as Horlicks and Boost.