It was expected. So I ignored the news that RCom and Sistema were in merger talks. What got my attention was the Aircel angle. People have been talking about collaboration between the Ambani brothers (Jio and RCom). Now that get’s real interesting. I guess the Competition Authority is watching now.
The main motivation for RCom and Aircel is debt reduction; RCom is divesting holdings in its overseas and tower units, while Aircel is attempting to sell 4G spectrum to Bharti Airtel. It has been claimed that RCom is reluctant to undergo a full-scale merger and would instead prefer to trade and share spectrum.
However, a more typical merger could result in Aircel’s parent company Maxis becoming the largest stakeholder, rather than RCom owner, the Anil Ambani group. The former would likely receive a stake of around 30-40%, while Anil Ambani’s would be less than 30%. Sistema’s holding would be less than 10%, with the remainder divided among RCom shareholders.