Aditya Birla Nuvo to acquire 15 per cent additional stake in Idea Cellular

10 April 2006

AV Birla group company Aditya Birla Nuvo has informed the exchanges that it would acquire an additional 15-per cent stake in Idea Cellular for Rs1,373 crore. After the acquisition, the company's stake in Idea would go up to 35.74 per cent.

The company did not identify the seller but it is clearly the Tata Group, the only other major shareholder in Idea Cellular. The AV Birla group currently holds 50 per cent of Idea while Tata''s have 48.15 per cent.

Indo-Gulf Fertilisers holds nearly 30 per cent of Idea Cellular. Indo-Gulf is being merged with Aditya Birla Cellular and after the merger, Aditya Birla Nuvo would hold nearly 66 per cent of Idea.

The deal values Idea Cellular at Rs9,153 crore and the Tata group would realise Rs4,407 crore for its 48.15 per cent stake if it makes a complete exit. There are media reports that entrepreneur C Sivansankaran who holds 1.7 per cent of Idea has agreed to sell out to the AV Birla group for close to Rs150 crore.

The AV Birla group was engaged in a public dispute with the Tata group over the latter's holdings in Idea Cellular. Tata group owns CDMA mobile operator Tata Teleservices, which has presence across the country. According to current regulation, no single group or entity can hold 10 per cent or more shares in more than one telecom operator in a circle.

After initial resistance, the Tata group gave in to the ministry of telecom to divest its stake in Idea. The group received an offer from Malaysian telecom company Maxis, believed to be in the region of Rs4,400 crore, for its stake in Idea. As per the terms of the shareholder agreement, the Tata group had reportedly asked AV Birla group to match the Maxis offer.