The owners of Air India and Vistara have decided to combine their local airline operations, creating India's largest international carrier and second largest domestic carrier in terms of market share and aircraft fleet. As part of the agreement, Singapore Airlines (SIA) will own 25.1% and Tata Sons will hold 74.9% of the combined company.
Currently, Tata Sons owns 100% in Air India and 51% in Vistara, with SIA holding the balance 49%. Tata Sons and SIA did not disclose the merger ratio but the latter said it will invest £205.9 million ($250 million) in the combined entity as part of the transaction.
Unless other local players decide to bring in a foreign partner as investor, SIA would continue to be the only international carrier with a sizable stake in an Indian airline after the merger is completed. Shareholders of SIA will have the ability to veto special resolutions with a 25% plus one share in the combined unit. According to the law, special resolutions must receive the support of at least 75% of the shareholders.
By March 2024, the merger should be complete, pending clearance from the company law tribunal, Indian and international anti-competition authorities, and other governing organisations. Air India and Vistara will continue to run independently throughout this time.
