Idea to acquire 40.8 per cent in Spice Communications
25 Jun 2008, 1535 Hrs

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New Delhi, June 25(ANI): The Aditya Birla Group's Idea Cellular today announced that it would acquire a 40.8 per cent stake in its rival mobile operator Spice Communications, for over Rs 2,700 crore in shares and cash.

Besides, Idea and Telekom Malaysia would make an open offer to acquire a further 20 percent stake in Spice for over Rs1, 000 crore.

The Malaysian firm would get over 46.4 crore Idea shares on a preferential basis for about Rs 7,300 crore.

Idea would acquire 281,489,350 shares of Spice Communications, representing a 40.8 per cent stake, at a price of Rs 77.3 per share.

The merger would involve an exchange ratio of 49 Idea shares for every 100 shares of Spice, subject to all regulatory approvals, including the Department of Telecommunications

"Idea will benefit operationally by leveraging synergies with TMI which will be a significant shareholder of our company," Idea Cellular Ltd Chairman Kumar Mangalam Birla said.

The deal allows Idea to explore wireless markets in Punjab and Karnataka, which constitute 11 per cent of the country's total wireless subscribers.

In reaction to the announcement, shares of Idea Cellular rose by 6.80 per cent over its previous close in the Bombay Stock Exchange. (ANI)