India’s RCom has entered non-binding talks to acquire smaller rival Aircel, following its November agreement to buy Sistema-owned SSTL.The potential double merger represents the latest move towards consolidation of the country’s 12-operator telecoms market.
India’s RCom (NSE:RCOM) has entered non-binding talks to acquire smaller rival Aircel, following its November agreement to buy Sistema-owned SSTL.
The number four player said it had entered into a 90-day exclusivity period with Aircel shareholders Maxis Communications (MYX:6012) and Sindya Securities and Investments Private Limited “to consider the potential merger to mutually derive the expected substantial benefits of in-country consolidation, including opex and capex synergies and revenue enhancement.”
Were an agreement to go ahead, the merger would exclude Reliance Infratel – RCom’s towers and optical fibre infrastructure unit – which RCom agreed to sell to Tillman Global Holdings and TPG in early December.
In October, the Economic Times reported that a three-way deal among RCom, SSTL and Aircel was under consideration, something a spokesperson for Sistema said “did not correspond to reality” in November.
RCom is separately eyeing a spectrum sharing pact with Reliance Jio, a 4G operator set to launch in early 2016.
The new operator’s entry is expected to trigger a wave of consolidation that will shrink the market to five or six players: Bharti Airtel, Vodafone and Idea Cellular, Reliance Jio, state-run BSNL-MTNL and perhaps another merged entity, said Bharti Enterprises chairman Sunil Mittal in early December.
Expected target Videocon has meanwhile agreed to sell some spectrum to Idea, and is reportedly close to a similar deal with Norway’s Telenor.