Singapore Approves Air India-Vistara Merger
The Competition and Consumer Commission of Singapore (CCCS), on Tuesday, said that it has approved the merger between Air India and Vistara, marking another step towards the creation of India's second-largest airline.
CCCS stated that both airlines have committed to maintaining capacity as of 2019 on routes between Singapore and Delhi, Mumbai, Chennai and Trichy. This move advances the consolidation efforts of Tata Group's airline business.
Tata Sons and Singapore Airlines (SIA) will merge Vistara with Air India to form India’s second-largest carrier. SIA will hold a 25.1 per cent stake in the entity with an equity infusion of Rs 2,058.50 crore, while Tata will hold the remaining stake.
The deal is part of Tata Sons' efforts to streamline the conglomerate’s businesses and enhance efficiency.
"After evaluating the feedback provided, CCCS considers the proposed commitments sufficient to address the competition concerns arising from the merger and hence approves it," the commission stated in a release.
CCCS conducted a market testing exercise to assess whether the proposed commitments would adequately address the competition concerns arising from the merger. Most stakeholders did not raise any concerns, except for one.
In its preliminary review, CCCS had expressed concerns about Tata Group's acquisition of Air India potentially limiting competition on the India-Singapore air routes. The commission sought certain commitments from the Tata Group to address these competition concerns.
In September last year, the Competition Commission of India (CCI) approved Vistara’s merger with Air India after receiving similar commitments from both airlines to adhere to their existing capacity on certain routes.
Both airlines are in the process of obtaining approvals from regulators in other countries where they operate.
The Tata Group anticipates receiving regulatory clearances, including those from the National Company Law Tribunal, Ministry of Civil Aviation and Department for Promotion of Industry and Internal Trade, by mid-2024. Following this, they will be able to commence commercial integration, such as establishing network synergies.
The Tata Group aims to complete the merger by 2025. The full merger of operations will take time, as merging networks and operations is a more complex process, according to a leading media house.
