Deccan, Kingfisher Airlines merger in final stagesDecember 20th, 2007 - 6:00 pm ICT by admin
Bangalore, Dec 20 (ANI) Boards of Deccan Aviation and Kingfisher Airlines have announced to merge both the airlines to create a mega airline.
Deccan Aviation will merge its scheduled airline operations into the unlisted Kingfisher Airlines, to create one of the biggest air carriers in India and pave the way for the latter to fly overseas.
The merged airliner which is to come up by next year will be called Kingfisher Airlines, officials from the two carriers said after a four-hour meeting late Wednesday.
Deccan founder G R Gopinath said the Deccan Board, which comprises of four independent directors as it is a listed company, unanimously without descent, along with the Kingfisher Board from their side have recommended that one merged cooperative entity be created to get the best synergies and cost; and the greatest value for customer in creating a great infrastructure airline in this country.
While the Deccan will be called Kingfisher Airlines after the merger, but the charter operations of Deccan will be spun off into a separate firm to be equally owned by Deccan’s founder G R Gopinath and the UB group.
India’s top spirits maker UB group, which runs Kingfisher Airlines, bought a 26 percent stake in Deccan in May through United Breweries (Holdings) and subsequently raised it to 46 percent.
The merger was recommended by consultancy firm Accenture Consulting; and the merger methodology would be suggested by consultants KPMG and Dalal and Shah.
The details of the merger, the valuations, the swap ratios etc will be worked out by KPMG and Dalal and Shah. They will now be appointed to very quickly come up with the valuations and recommended merger structure,” said UB group chairman Vijay Mallya, adding the boards of both the companies will meet again in early January to go ahead with various formalities.
The merger will help Kingfisher to meet Indian regulatory requirement of five year’s operation to fly overseas destinations. Deccan, which started in 2003 as a low cost airline, drastically changed the aviation scenario in India. It will be eligible to offer overseas flights by mid-2008.
UB group chairman Vijay Mallya will be the chairman and chief executive of the merged entity and Gopinath its vice-chairman.
India’s top airline Jet Airways bought unlisted Sahara Airlines in April and the Indian government merged two state-run airlines Air India and Indian Airlines in August. (ANI)
Tags: air carriers, airline operations, airliner, charter operations, dalal, deccan aviation, formalities, gopinath, group chairman, group india, independent directors, kingfisher, kingfisher airlines, kpmg, listed company, overseas destinations, regulatory requirement, ub group, united breweries, vijay mallya