India’s Reliance Jio Infocomm signed a deal to acquire the assets of troubled Reliance Communications (RCom) valued at nearly INR240 billion ($3.75 billion), Reuters reported.
The deal reportedly covers all of RCom’s spectrum, tower, fibre optic and other telecoms infrastructure assets, but a specific figure was not disclosed. Its spectrum alone is valued at about INR190 billion.
In late December Jio, which is owned by Reliance Industries and controlled by billionaire Mukesh Ambani (pictured), emerged as the front-runner to acquire the assets of RCom, which plans to shut down major parts of its wireless business after a failed merger bid with Aircel.
RCom is selling off the assets to pay down its estimated INR450 billion debt held by a group of local and international banks, which started insolvency proceedings over missed payments.
Indian press reports in October indicated RCom was planning to shutter major parts of its wireless business in November due to increased competition in the Indian market and a failed merger bid for Aircel. RCom blamed the failed deal on “inordinate delays caused by legal and regulatory uncertainties”.
A sale would see the return of RCom’s telecoms operations back into the fold of Reliance Industries after a feud in 2005 led to the split of Reliance Industries, with Mukesh Ambani keeping the main oil and gas business and his brother Anil Ambani spinning off the telecoms and power units.
A Jio-RCom deal would mark the next level of consolidation in the once fragmented Indian market. Jio’s entrance into the market in 2016 led to a wave of inter-market mergers. Vodafone India agreed to tie-up with Idea Cellular, while Airtel stuck a deal to acquire Telenor’s Indian operations.