RCom and SSTL merger gets CCI stamp

The proposed merger of Sistema Shyam Teleservices Limited and Reliance Communications has been approved by the Competition Commission of India (CCI). Since 2009, this will be the first major amalgamation to happen in this intensely competitive sector.

As per ET reports, Reliance Communications and SSTL were in talks for a possible takeover in an all-stock deal which is expected to be worth around Rs 4,500-5,000 crore. The deal would give SSTL’s shareholders a stake of around 10% in the merged entity.

As per the deal, Reliance would have access to airwaves in the 850 Mhz band which will be most probably be used for its forthcoming 4G services. The validity of its licenses in eight high-revenue generating circles like Delhi, Gujarat, Karnataka and Tamil Nadu will also be extended by 12 years. SSTL, on the other hand, will get to be a part of a stronger company and will finally be able to expand its CDMA-based business.

SSTL is the Indian telecom unit of Russia's Sistema JSFC.

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