Birlas Buy Tata's Stake in "Idea Cellular"| Business Strategy Case Studies

Details

Case Code : CLBS073
Publication date : 2009
Subject : Business Strategy
Industry : Telecom
Length : 04 Pages
Price : Rs. 100

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Key words:

AV Birla Group, Tata Group, stake, Idea Cellular (Idea), joint venture, ditya Birla Nuvo, GSM, Cingular Wireless (Cingular), SBC Communications, Bell South, Tata Teleservices Limited (Tata Tele), CDMA, Department of Telecommunications (DOT)

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Abstract:

This Micro Case Study discusses about the AV Birla Group acquiring the Tata Group stake of 48.14% in Idea Cellular (Idea), whose 1/3 rd equity was held by Birlas, Tata's and AT&T Wireless, The Tata Group also has 100% stake heir subsidiary, Tata Teleservices Limited (Tata Tele), a CDMA-based mobile service provider.

Introduction

On April 10, 2006, the AV Birla Group (Birlas) announced that it would acquire the Tata Group's (Tata's) 48.14% stake in Idea Cellular (Idea). This marked the end of a tussle, which was going on for many months, between India's two big industrial houses over the ownership stake of Idea, their telecom joint venture.

The Birlas said that they would pay Rs 44.06 billion (at Rs 40.51 a share) in this deal. While 15% of the 48.14% stake would be acquired by Aditya Birla Nuvo, a company in-charge of the Birlas new business initiatives, the remaining stake would be acquired by Birla TMT holdings Private Ltd., an AV Birla family owned company.

Idea was set up in 1995, where in the Birlas, Tata's and AT&T Wireless, USA, held one-third equity in the new company...

Birlas Buy Tata's Stake in "Idea Cellular"*