Vodafone’s Indian merger with Idea could net investment banks a tenth of total annual fees in the country
A raft of major investment banks are circling Vodafone in an attempt to secure bumper returns from advising on the telecoms giant's £10bn Indian merger with Idea Cellular, according to reports.
BoAML, UBS and Standard Chartered are understood to be fighting among themselves to secure the mandate, sources told Reuters.
And lucrative advisory roles could net them up to $40m, according to M&A advisory firm Freeman Consulting – around 10 per cent of the total fees generated by investment banks in India last year.
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Vodafone announced last month it had entered into talks with Idea Cellular to merge operations in the face of increasing competition from cut price operator Reliance Jio.
Reports emerged in August last year Vodafone was teeing up a deal with Idea after shelving plans to list in India and taking a painful $5bn writedown on its $20bn investment in operations in the country.
Sources said BoAML and UBS – who were previously hired for Vodafone's aborted Indian listing – are in talks with Vodafone together with corporate finance specialists Rothschilds, while Morgan Stanley have already inked an advisory role with the FTSE 100 telecoms giant.
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Idea Cellular is likely to secure the services of local Indian boutique firms together with Standard Chartered.
Total M&A fees collected by investment banks were $463m in 2016, according to Thomson Reuters, with advisory firms charging meagre fees – as much as 50 per cent lower – in comparison to the likes of the US, Hong Kong and Singapore.