Competition Commission of India (CCI) approved the acquisition of AirAsia India by Air India. It is based on the request made to the fair trade regulator, where Air India had proposed buying low-cost airline AirAsia India.
Nine years after entering India with great aspirations, Malaysia’s AirAsia will be leaving the airline business as a result of the decision.
In the shareholders’ agreement between AirAsia and Tata Sons, the latter will purchase AirAsia’s 16.33 percent ownership either directly or through an affiliate. The acquisition of AirAsia’s stock was carried out through Air India, which is now a Tata’s affiliate.
For Rs 139 crore, Air India would purchase AirAsia’s 16.3 percent stake in the airline partnership. Tata Sons owns the 83.7 percent residual stock in AirAsia India. Air India will purchase this as well. On January 27 of this year, Tata Sons purchased Air India through its wholly-owned subsidiary Talace in a deal of Rs 18,000 crore in equity and debt.
The CCI application is the first step by Tata Sons to integrate its aviation business, which also includes low-cost carrier Air India Express. The proposed acquisition of AirAsia India by Air India “will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India”, read the CCI application.
Source: Economic Times