Reliance Communications expects merger deal with Aircel shortly

Reliance Communications Ltd said on Thursday it expects to sign a binding definitive deal for its proposed merger with smaller rival Aircel Ltd “very shortly”.

The company, however, didn’t say whether it extended the exclusivity period for the talks. The period to hold talks exclusively between Reliance Communications and Aircel ended on Thursday, after the two companies had previously extended the duration twice.

The proposed deal will be subject to regulatory, shareholders’ and other third-party approvals. “Hence, there is no certainty that any transaction will result,” the telecom operator said.

Reliance Communications, part of industrialist Anil Ambani’s Reliance Group, and Aircel shareholders including Malaysia’s Maxis Communications Berhad and Sindya Securities and Investments Pvt Ltd entered into talks to merge their wireless businesses in December last year.

At the time, the companies entered a 90-day exclusivity period for the deal. On March 22, they extended the merger talks by 60 days. Last month, the two companies again extended the discussion period by 30 days.

If the deal goes through, it would create an entity holding almost a fifth of the total spectrum allocated to the industry and would hold spectrum across all allocated bands — 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 MHz — for second-, third- and fourth-generation telecom services.

The deal will exclude Reliance Communications’ tower and optical fibre assets for which a separate sale process is ongoing, the company said at the time.

Reliance Communications, which competes with bigger rivals Bharti Airtel Ltd, Vodafone India Ltd and Idea Cellular Ltd, had said on December 4 that it was in initial talks with private equity investors Tillman Global and TPG Asia to sell its telecom towers business. The talks with Tillman and TPG were part of efforts by Reliance Communications to reduce its net debt of Rs 39,900 crore. But there has been no final announcement so far on this deal either.

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