Tata SIA Airlines eyes all-stock merger of Vistara with Jet Airways

Mumbai: The Tata group and Naresh Goyal-promoted Jet Airways are inching towards a two-step transaction, the first leg of which could see the merger of Jet with Tata SIA Airlines, the joint venture between Tatas and Singapore Airlines that operates Vistara. The second step of the deal could involve the purchase of the Goyal family’s stake in the combined entity by Singapore Airlines.
Two people with direct knowledge of the development said the talks between representatives of Tata group, Singapore Airlines and the Jet Airways management gathered pace after US private equity giant TPG Capital opted to go slow on its talks to buy a stake in Jet. As per the terms under discussion, Jet Airways will first merge with Tata SIA through a share swap.
The Naresh Goyal family, Etihad, Tata Sons and Singapore Airlines will all become partners in the new company. In the second stage, Singapore Airlines will buy out the shares of the Goyal family, giving them a complete exit. Goyal’s partner Etihad may continue with the venture as minority shareholder.
“However, if Etihad needs an exit, we are ready to buy them out as well. Eventually, Tatas and Singapore Airlines will control the entity,” said one of the two persons quoted above. When contacted, a Tata group spokesperson said, “We don’t comment on market speculation.” Jet Airways didn’t respond to ET’s mail seeking comment.
The transaction, if successful, will give the Tata group’s aviation plans a muchneeded boost as it will secure landing rights, routes and related infrastructure amenities of Jet after the deal. Tata, along with its partner Singapore Airlines, are expected to infuse capital to enable the Jet-Vistara combine to function effectively.
15/11/18 Kala Vijayraghavan/Indulal PM/Anirban Chowdhury/Economic Times

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