Air India merger with Vistara: Tata SIA Airlines Ltd (TSAL) is a joint venture between Tata Sons Pvt Ltd (TSPL) and Singapore Airlines
Tata Group has reportedly sought an approval from the Competition Commission of India (CCI) to merge its flagship airline Air India with Vistara, a carrier in alliance with Singapore Airlines (SIA). Before this, Tata Group had already announced that its airline business, including that of Vistara, would soon be under one brand, Air India.
According to a PTI report, Tata SIA Airlines Ltd (TSAL) is a joint venture between Tata Sons Pvt Ltd (TSPL) and Singapore Airlines. In this alliance, Tata Sons has a 51 per cent stake and SIA has a 49 per cent stake. Accordingly, the TSAL operates under the brand name Vistara, which would now cease to exist with its merger with Air India.
“The proposed combination relates to the merger of TSAL (Vistara) into Air India Ltd (AIL), with Air India being the surviving entity and the acquisition of shares in the merged entity by SIA and TSPL… Acquisition of additional shares in the merged entity by SIA pursuant to a preferential allotment,” a notice filed with CCI read, as per PTI.
It must be noted that the proposed deal involves both a merger as well as acquisition of shares and as per the rules, gets notifiable under Section 5 of the Competition Act, 2022. If the deal gets completed as planned, TSPL will reportedly hold 51 per cent equity of the merged entity and SIA will hold a minority stake, probably of around 25 per cent. TSPL would also continue to retain control over Air India and its subsidiaries.
As per Tata Group’s previous statements, the proposed merger of Air India and Vistara is aimed at having a single low-cost carrier for the Air India group under Tata Group. As per the report, post merger, the entity would be branded as ‘Air India Express.’
(With inputs from PTI)