Air India-Vistara merger: To complete the deal to merge its full-service carriers Vistara and Air India, the Tata group has sought approval from fair trade regulator Competition Commission of India (CCI).
Tata SIA Airlines Ltd (TSAL) is a joint venture between Tata Sons Pvt Ltd (TSPL) and Singapore Airlines (SIA), with Tata Sons and SIA holding 51 per cent and 49 per cent stake, respectively. TSAL operates under the Vistara brand name.
“The proposed combination relates to the merger of TSAL (Vistara) with Air India Ltd (AIL), of which Air India is the surviving entity and the acquisition of shares in the merged entity by SIA and TSPL. Acquisition of additional shares in the merged entity As per the preferential allotment by SIA,” said a notice filed with the CCI.
TSPL will hold 51% equity after the merger
Post completion of the deal, TSPL will hold 51 per cent equity of the merged entity and will continue to retain control over Air India and its subsidiaries, while SIA will hold a minority – 25.1 per cent – stake in the entity.
The notice states that the proposed transaction includes merger as well as acquisition of shares and is notified under section 5 of the Competition Act, 2002. In November last year, the Tata group announced the merger of Vistara with Air India under a deal in which Singapore Airlines would also acquire a 25.1 per cent stake in Air India.
Operational review process underway
It also said that an operational review process was underway to integrate AIX Connect (earlier known as AirAsia India) with Air India Express and the merger was likely by the end of 2023. Air India Group. Post merger, the entity will be branded as ‘Air India Express’.
At present, the market share of Air India and Vistara was 18.3 per cent in October. If AirAsia India (now known as AIX Connect) is also included, the cumulative market share of Tata Group-owned airlines in the domestic market would be 25.9 per cent. Individually, AirAsia India had a domestic market share of 7.6 per cent.
The deal will make Air India the country’s largest international carrier and second largest domestic carrier. TSPL is an investment holding company having direct and indirect shareholding and control over Air India Ltd and its subsidiaries.
(With PTI inputs)