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Merger

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Horizontal Merger

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Telecommunications

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Airtel - Tata Teleservices Limited and Tata Teleservices (Maharashtra) Limited

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The deal was a merger where Airtel had absorbed Tata Teleservices' CMB operations in 19 telecom circles - 17 under TTSL and 2 under Tata Teleservices (Maharashtra) Ltd. It also agreed to take over a small portion of the unpaid spectrum liability of Tata Teleservices.

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Airtel gave 970,668 equity shares, fully paid up of face value of Rs 5 per share of the company to the eligible equity shareholders of TTML in the ratio of 1 equity share of the company for every 2,014 equity shares held in TTML by eligible equity shareholders of TTML.

The Tata Group paid lenders and the government about Rs 50,000 crore ($7.3 billion) to help complete the deal.

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But the Department of Telecom is yet to take this merger on record and is likely to challenge the deal in the Supreme Court.

Bharti Airtel's committee of directors on Friday approved allotting more than 9.7 lakh equity shares and 497 redeemable preference shares to shareholders of Tata Teleservices as part the merger between the two companies. "970,668 equity shares (in aggregate including fractional entitlements) fully paid up of face value of Rs 5 per share of the company to the eligible equity shareholders of TTML in the ratio of 1 equity share of the company for every 2,014 equity shares held in TTML by eligible equity shareholders of TTML," Airtel said in a BSE filing.

The allocation ...

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First Published: Fri, July 26 2019. 22:58 IST

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Airtel to give 9.7 lakh equity shares to Tata Teleservices stakeholders

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Read more about Airtel to give 9.7 lakh equity shares to Tata Teleservices stakeholders on Business Standard. But the Department of Telecom is yet to take this merger on record and is likely to challenge the deal in the Supreme Court.

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The Airtel stock closed 0.5% higher at Rs 348.50, TTML gained 2.7% to end at Rs 3.79.

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Tata Teleservices rallies 15% after DoT approves merger with Bharti Airtel

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The department of telecommunications has approved the merger of the consumer mobile operations of the Tata group with Bharti Airtel.

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- The TTSL-Airtel merger will bolster the latter's spectrum pool with significant additional 178.5 MHz spectrum in 1800, 2100 and 850 MHz bands, all widely used for 4G.

-The deal also helped Airtel to increase its subscriber base.
-For Tata Group the reason was to shed its loss-making wireless telephone business which was a drag on group’s financials for several years

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Agencies
While Airtel had paid the required amount and announced the completion of the merger in July, DoT did not give a formal approval.

The department of telecommunications ( DoT) has moved the Supreme Court against the telecom tribunal's decision that mandated it to clear the merger deal between Bharti Airtel and the consumer mobility business of Tata Teleservices.

DoT has sought dues worth over Rs 8,000 crore on account of one-time spectrum charges (OTSC) and said in its appeal to the apex court that the demand was based on the licence conditions, said people aware of the developments. The appeal was filed last week and hearing has been set for November 15.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had in May partially stayed DoT's demand for about Rs 8,300 crore in bank guarantee on OTSC, citing that similar orders in merger cases in the telecom industry by various courts, including the Bombay High Court.

The tribunal had asked DoT to take on record the merger of Bharti Airtel and Bharti Hexacom with de-merged undertaking of Tata Teleservices. It had asked Airtel to submit half of the Rs 1,287.97-crore demand raised by DoT as OTSC for the Chennai circle licence extension from November 30, 2014 to September 27, 2021within four weeks. It also allowed the merging companies to "operationalise the spectrum and undertake other consequential activities".

While Airtel had paid the required amount and announced the completion of the merger in July, DoT did not give a formal approval.

In fact, DoT has recently directed all circle heads to treat Bharti Airtel and Tata Teleservices as separate entities and to deal with customer acquisition process and all compliance-related issues of the two companies separately.

As part of the agreement signed between Airtel and the Tata Group company in October 2017, Airtel was to absorb the telco's consumer mobile operations in 19 circles - 17 under Tata Teleservices and two under Tata Teleservices (Maharashtra). As part of the proposed agreement, Airtel was also to take over a small portion of the unpaid spectrum liability of Tata Teleservices.

The Sunil Mittal-led telco will get an additional 178.5 MHz of spectrum in three bands - 1800 MHz, 2100 MHz and 850 MHz - that are widely used for 4G, an area where Airtel is expanding fast to keep pace with Reliance Jio Infocomm.

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Airtel Tata Teleservices Merger: DoT moves SC against merger of Airtel with Tata Tele arm

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DoT has sought dues worth over Rs 8,000 crore on account of one-time spectrum charges (OTSC) and said in its appeal to the apex court that the demand was based on the licence conditions, said people aware of the developments. The appeal was filed last week and hearing has been set for November 15.

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Industry Shocks theory is applicable to this merger and every other deal that happened during this merger wave in the telecom industry. The trigger for the wave entry of jio caused a Technological disruption, by providing cheap data. The resulting tarrif war priced out many players with small market shares.