On Friday, Singapore Airlines (SIA) announced that it has received approval from the Indian government for Foreign Direct Investment (FDI) as part of the proposed merger between Vistara and Air India. This deal, set to create one of the world’s largest airline groups, marks a significant milestone in the merger process. The approval clears a key regulatory hurdle, with the merger expected to be completed by the end of the year.
The proposed merger of Vistara with Air India was first announced in November 2022. Air India is owned by Tata Group, while Vistara is a joint venture between Tata Group and Singapore Airlines, with the former holding a 51% stake and the latter holding 49%. The merger will see Singapore Airlines acquiring a 25.1% stake in the enlarged Air India.
On Friday, Singapore Airlines confirmed that it had received FDI approval from the Indian government for its investment into the newly merged entity, Air India. This approval is crucial for the merger's progress and follows other regulatory clearances that have been secured. The airline's regulatory filing to the Singapore Stock Exchange highlighted that this FDI approval, along with previously obtained anti-trust and merger control clearances, represents a significant step towards finalizing the merger.
The completion of the Vistara-Air India merger is contingent upon compliance with applicable Indian laws. Singapore Airlines projects that the merger will be completed by the end of 2024. However, the airline indicated that there are ongoing discussions to extend the original long stop date for the merger, which was initially set for October 31, 2024.
The merger’s progress has been subject to various regulatory approvals. In June, the National Company Law Tribunal (NCLT) approved the merger, marking a critical legal endorsement. Additionally, in March, Singapore’s competition regulator, the Competition and Consumer Commission of Singapore (CCCS), gave a conditional nod to the deal. Earlier, in September 2023, the Competition Commission of India (CCI) also approved the merger, albeit with certain conditions.
The recent approval from the Indian government for FDI represents a pivotal development in the merger process. It is one of several regulatory and legal clearances required to finalize the deal. The approval from the Indian government is essential for integrating Vistara into Air India and for Singapore Airlines to obtain its 25.1% stake in the new entity.
Singapore Airlines has emphasized that while the merger is progressing, compliance with Indian laws remains a critical factor. The airline stated in its regulatory filing that it expects the merger to be completed by the end of 2024, subject to all necessary legal and regulatory requirements being met.
Singapore Airlines has committed to making necessary announcements regarding the merger’s completion or any other significant developments as they arise. The airline has indicated that further updates will be provided upon the merger’s finalization or if there are notable changes to the merger timeline or conditions.
The merger is set to create one of the largest airline groups globally, reflecting significant consolidation within the industry. As the process moves forward, all parties involved will continue to navigate regulatory requirements and ensure compliance with legal standards to achieve a successful merger.
Conclusion
The approval from the Indian government marks a significant step forward for the proposed merger between Vistara and Air India. With several regulatory clearances already in place, the focus now shifts to ensuring full compliance with applicable laws as the parties work towards completing the merger by the end of 2024. Singapore Airlines’ acquisition of a stake in Air India represents a major strategic move in the global airline industry, poised to reshape the competitive landscape. The ongoing developments will be closely watched by industry stakeholders and regulators alike.