Despite encountering numerous obstacles, the Competition Commission of India (CCI) granted its approval on September 1 for the merger of Vistara, an airline under the Tata Group, and Air India, albeit with specific conditions. This green light means that Air India has the potential to emerge as the largest international airline in the country and the second-largest domestic carrier, following IndiGo.
“CCI approves the merger of Tata SIA Airlines into Air India, and acquisition of certain shareholding by Singapore Airlines (SIA) in Air India subject to compliance of voluntary commitments offered by the parties,” the anti-trust agency posted on X, formerly Twitter. It also added that the details will follow.
The approval comes after months when CCI in June issued a show cause notice to Air India, seeking clarification on why its proposed merger with Vistara should not be investigated over concerns about competition in the aviation sector.
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CCI Approval Marks Significant Progress for Tata Group’s Aviation Expansion
The development is a major step forward for Tata Group in consolidating its aviation business.
Vistara and Air India, two full-service airlines, are part of the Tata Group. Singapore Airlines (SIA) holds a 49 percent stake in Vistara.
As a part of the deal, SIA would pump into Rs 2,059 crore in the expanded share capital of Air India for a 25.1 percent stake. Tata Sons would own the remaining 74.9 percent stake in the combined entity.
In April of this year, Tata Sons and SIA submitted an application for the merger to the CCI. In their application, they assured that the planned merger of Vistara and Air India would not disrupt the competitive dynamics or negatively affect competition within India. They were optimistic about finalizing the merger agreement by March 2024.
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