![National Company Law Tribunal Approves Air India and Vistara Merger](https://digitalscoopindia.in/wp-content/uploads/2024/06/FHIbC7bIAAgdEN-1703064771532-1024x512.jpeg)
In a significant development for the aviation industry, the National Company Law Tribunal (NCLT) has granted approval for the merger of Air India and Vistara, marking a pivotal step towards the formation of one of the world’s largest airline conglomerates. The post-merger entity will witness Singapore Airlines holding a 25.1% stake in Air India, following the announcement of the merger in November 2022.
Vistara, a joint venture between Singapore Airlines and the Tata Group, is set to be amalgamated with Air India under the “composite scheme of arrangement” involving Talace, Air India, and Vistara, all part of the Tata Group. The anticipated completion of the merger is slated for the end of this year.
The NCLT’s Chandigarh bench, in a detailed 31-page order, noted the necessary approvals received from shareholders, creditors, and regulatory bodies such as the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA). The order emphasized the absence of significant objections from stakeholders or regulatory authorities, including the Income Tax department.
“The sanctioned scheme shall be binding on the petitioner companies and their respective shareholders,” stated the NCLT order, affirming the legal validity and enforceability of the merger plan.
The dissolution of the Transferor Companies (Vistara) is anticipated upon completion of the merger and requisite formalities, including approvals such as Foreign Direct Investment (FDI) clearance from Singapore Airlines and security clearances from DGCA/MOCA, within a stipulated nine-month period from the date of the NCLT order.
The conditional approval from Singapore’s competition regulator CCCS in March and subsequent clearance from the CCI in September 2023 underscore the regulatory scrutiny and due diligence involved in the merger process.
The takeover of Air India by Tata Group in January 2022 marked a significant strategic move, and the impending merger with Vistara signifies a consolidation effort in the aviation sector, positioning the conglomerate as a formidable player in the global airline market.
This development is poised to reshape the competitive landscape in the aviation industry, with expectations of enhanced operational efficiencies, synergies, and market competitiveness for the merged entity under the Tata Group’s stewardship.
Sources By Agencies