Air India-Vistara merger: The Indian government has greenlit the foreign direct investment for the proposed merger between the two airlines, Singapore Airlines said on Friday, giving an update on the deal that will create one of the world's largest airline groups.
The FDI nod will pave the way for Singapore Airlines' investment worth S$360 million ($276 million) into the new combined carrier.
The deal between Singapore Airlines and Tata-owned Air India is likely to be completed by the end of this year. With the clearance in place, the merger, which will see Singapore Airlines acquire a 25.1 percent stake in Air India, is expected to be completed by the end of this year.
The government's FDI approval, along with anti-trust and merger control clearance and approvals, is likely to speed up the Air India-Vistara merger, said Singapore Airlines (SIA) in its regulatory filing on Friday.
"The FDI approval, together with anti-trust and merger control clearances and approvals, as well as other governmental and regulatory approvals received to-date, represent a significant development towards the completion of the proposed merger," the airline said in the filing to the Singapore Stock Exchange.
The two airlines finalised their merger plan in November 2022. Tata Group owns Air India and runs Vistara as a 51:39 joint venture with Singapore Airlines.
"At this juncture, completion of the proposed merger is anticipated to occur by the end of 2024," the company added. The Air India-Vistara merger will transform into one of the biggest airline groups.
The two parties are mulling over the extension of the long stop date for the completion of the merger. Earlier, it was expected to be October 31, 2024.
"SIA will make the necessary announcement(s) upon completion of the proposed merger or if there are other significant developments," the filing said on Friday.
The Indian merger will enable Singapore Airline to get a greater exposure to one of the most promising travel industry market. The merger will also designate Singapore Airline as the the only foreign player to have a significant stake in one of India's airlines.
