A significant milestone has been reached in the merger of Air India and Vistara, as the Indian government has approved the necessary foreign direct investment (FDI). This approval, confirmed by Singapore Airlines on Friday, August 30, 2024, marks a crucial step towards finalizing the merger, which is expected to be completed by the end of the year.
The merger, first announced in November 2022, will see Tata-owned Air India combine with Vistara, a joint venture between the Tata Group (51% stake) and Singapore Airlines (49% stake). As part of the merger, Singapore Airlines will acquire a 25.1% stake in the combined entity, signifying its substantial involvement in the deal.
Singapore Airlines, in a recent regulatory filing, stated that the Indian government’s FDI approval for the expansion of Air India is a vital step toward concluding the merger. However, the completion remains subject to adherence to relevant Indian legal requirements. Discussions are currently underway to extend the merger’s long stop date, initially set for October 31, 2024, to ensure all regulatory and legal requirements are met.
The merger has already gained significant approvals. In June, the National Company Law Tribunal (NCLT) gave its approval. Additionally, in March, the merger received conditional clearance from Singapore’s Competition and Consumer Commission (CCCS). The Competition Commission of India (CCI) granted its approval, subject to specific conditions, in September 2023, further paving the way for the merger’s completion.
The merger of Air India and Vistara has the potential to create one of the largest airline groups globally. This combination is expected to bring together the strengths of both airlines, offering passengers expanded networks, enhanced services, and greater competition in the aviation market.
