New Delhi, Dec 20 Fair market regulator Competition Commission of India on Monday approved the acquisition of Air India, Air India Express, and Air India SATS Airport Services by Talace, which is a wholly owned subsidiary of Tata Sons.
The acquisition envisaged 100 per cent equity share capital of Air India and Air India Express, and 50 per cent for that of Air India SATS Airport Services by Talace.
At present, Air India is wholly owned by the government.
The airline, along with AIXL, is primarily engaged in the business of providing domestic scheduled air passenger transport service, international scheduled air passenger transport service, and air cargo transport services.
Air India SATS Airport Services is engaged in the business of providing ground handling services at the Delhi, Bengaluru, Hyderabad, Mangaluru, and Thiruvananthapuram airports, and cargo handling services at Bengaluru airport.
In October, conglomerate Tata Group had entered into a share purchase agreement with the Central government for buying out the latter's stake in national carrier Air India, Air India Express, and AISATS.
Earlier, a Letter of Intent (LoI) was issued to the Tata Group. After the SPA, Tata Group had to fulfil the conditions precedent in the agreement before taking over the airline.
The rest of the transaction is expected to be completed by December with final formalities to finish by January.
Tata Sons' subsidiary Talace had emerged as the highest bidder for the national carrier under the divestment process. It had quoted an enterprise value of Rs 18,000 crore for 100 per cent equity shareholding of the Centre in Air India along with that of Air India Express and AISATS.
It was announced that out of Rs 18,000 crore, Talace will retain Rs 15,300 crore, while the rest will be paid to the Centre as the cash component.The bid was higher than the consortium, led by industrialist Ajay Singh, which had quoted an EV of Rs 15,100 crore.
On its part, the Centre had stipulated a reserve price of Rs 12,906 crore. There were only two bidders in the final stage of divestment.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor