Accenture to merge India’s state airlines
India’s state-owned carriers, Air India and Indian, have appointed a consortium led by Accenture, the US-based global management consulting company, to oversee the merger of India’s two flag carriers, an aviation source said.
A high-level panel took the decision on July 24 in New Delhi. “Both the boards of directors of Air India and Indian have approved the appointment, which will soon be made public,” the source told Gulf News in Dubai yesterday. Both carriers will make a formal announcement soon, the source said.
The mandate for merger, which would potentially create a global scale airline, would be one of the largest mandates in recent times. The value of the combined entity is estimated to be at around $5 billion to $7 billion. The new entity will have a workforce of about 35,000 employees.
The consortium, which also include Ambit Corporate Finance, won the mandate defeating rival bids submitted by ICICI Securities with financial institutions Deloitte Touche Tohmatsu, NM Rothschild and law firm MV Kini & Co, Morgan Stanley, Amarchand Mangaldas and AT Kearney and the Centre for Asia-Pacific Aviation.
The consultant will now chalk out a roadmap for the operational merger between the two carriers. The mandate also includes an advisory for capital-raising, preparation of business plans, strategic inputs and post integration issues. Eight merchant banking firms were initially in the race, three of which were shortlisted.
The merger is expected to be completed by early next year, which will pave the way for an initial public offering, the source said.
Air India had specified that the consultant should have a minimum share capital of Rs500 million and turnover of Rs1 billion.