Indian operator Reliance Communications and smaller rival Aircel extended merger talks for a further 60 days, “based on good progress made so far”.
RCom, India’s fourth largest operator, said the exclusivity period for talks with Aircel’s owners, majority shareholder Maxis Communications and investor Sindya Securities and Investments, will now run until 22 May, after first announcing non-binding negotiations in December for a 90 day period.
A tie-up would see the joint entity become a top three player in India, neck and neck with Vodafone India, although behind market leader Bharti Airtel.
In a statement, RCom maintained the discussions are “non-binding in nature” and “any transaction is subject to completion of due diligence, definitive documentation and regulatory, shareholder and other third party approvals. Hence, there is no certainty that any transaction will result”.
Economic Times reported in February that RCom and Maxis had agreed to an ownership structure that would see each hold 50 per cent of the joint entity, should the merger be agreed, although this is unconfirmed.
According to the report, both RCom and Aircel would also each transfer INR140 billion ($2.05 billion) of debt to the new entity, which would be renamed and rebranded.
RCom last year also struck a deal to acquire another smaller rival, Sistema Shyam Teleservices, for approximately $690 million, and a deal with Aircel has led to suggestions of a three way merger.