Tata Group's Air India & Vistara Set To Merge In 2025 & Create India's Second Biggest Airline

After getting India's approval in September last year, the Tata group has now got Singapore regulator's approval to go ahead with the merger of Air India and Vistara.

Tata Group's Air India & Vistara Get Singapore's Approval For Merger

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The merger of Air India and Vistara has been approved by Singapore's antitrust regulator, making it a big positive step towards the creation of India's second-largest airline.

Both airlines have committed to maintaining capacity as of 2019 on both sides of Singapore to Delhi, Mumbai, Chennai, and Trichy routes, according to the Competition and Consumer Commission of Singapore (CCCS), as per ET report. The action is in line with the Tata Group's efforts to merge its airline business.

India's second-largest airline will be formed by the merger of Vistara and Air India by Tata Sons and Singapore Airlines (SIA). SIA will invest Rs 2,058.50 crore in equity to acquire a 25.1% share in the company. Tata will keep the remainder. The deal is a component of Tata Sons' initiative to streamline and improve the efficiency of the conglomerate's operations.

Also Read: Narayana Murthy Shares Why He Once Turned Down Air India's Job Offer

Merger Likely To Be Completed In 2025

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The Tata group anticipates being able to begin commercial integration, such as network synergies, by mid-2024, after obtaining regulatory clearances from a number of agencies, including the National Company Law Tribunal, the Ministry of Civil Aviation, and the Department for Promotion of Industry and Internal Trade.

Vistara CEO Vinod Kannan had earlier said that the Tata group is aiming to complete the merger by 2025, adding that a total merger of operations will take time as merging networks and operations is more complex.

Air India-Vistara Merger Approved By Both India & Singapore Regulator

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"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 Competition and Consumer Commission of Singapore (CCCS) stated in a statement.

According to the CCCS, it tested the market to see if the suggested commitments would adequately address the merger's potential effects on competition. The Tata Group's acquisition of Air India had alarmed CCCS in its preliminary review because it might reduce competition on the India-Singapore air routes.

In order to address the competition concerns, it had asked the Tata group for specific commitments.

The Competition Commission of India (CCI) approved the merger of Vistara and Air India in September of last year following similar promises from both airlines to maintain their current capacity on specific routes.

The regulators of the other nations where the two airlines operate are also in the process of approving the airlines.

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