Vistara to be merged with Air India as Tata Group finalises deal with SIA

New Delhi, Nov 17: The Tata Group and Singapore Airlines (SIA) are learnt to have finalised the proposed murder of Air India and Vistara. Tatas will have about 75 per cent stake in the merged entity while the remaining will be with SIA.

In Vistara, Tatas and SIA hold 51 per cent and 49 per cent respectively reports said.

The proposed merger is targeted to be completed within a year after getting all approvals and the same will be announced shortly.

The Tata Group is hoping to develop Air India as an umbrella carrier though the merger the report also said. Tata Group wants to have Air India as the umbrella carrier with a full service arm formed by merging Vistara into the Maharaja and a low cost arm by combing AirAsia India into AI Express.

The merger would need several clearances from several agencies such as the Competition Commission of India. This process is expected to take up to six months.

This move will make Air India the second-largest airline in India in terms of fleet and market share.

The report also said that the merger may not be completed within a year. The Competition and Consumer Commission of Singapore had expressed concern Tata Group acquiring SIA. It had said that Tata's related entities have overlapping passenger routes as well as overlapping cargo routes.

In January this year, Tata Group regained control of Air India after emerging as the winner bidder. It had offered a bid of Rs 18,000 crore which comprised a cash payment of Rs 2,700 crore.