Singapore Airlines announced that it has received approval from the Indian government for foreign direct investment (FDI) as part of the proposed merger of Vistara with Air India, a deal that will potentially create one of the world's largest airline groups.
With the clearance in place, the merger that will see Singapore Airlines acquiring a 25.1% stake in Air India, is expected to be completed by the end of this year. The proposed merger was announced in November 2022. Air India is owned by Tata Group and Vistara is a 51:49 joint venture between Tatas and Singapore Airlines.
In a regulatory filing, Singapore Airlines (SIA) stated it has received approval from the Government of India for Foreign Direct Investment (FDI) into the enlarged Air India as part of the proposed merger.
“The FDI approval, together with anti-trust and merger control clearances and approvals, as well as other governmental and regulatory approvals received to date, represent a significant development towards the completion of the proposed merger", the airline said in the filing to the Singapore Stock Exchange.
The airline also said the completion of the merger continues to be subject to compliance by the parties with applicable Indian laws, which is currently expected to be completed in the next few months.
"At this juncture, completion of the proposed merger is anticipated to occur by the end of 2024", it added.
According to Singapore Airlines, the parties are in discussions to extend the long stop date for the completion of the merger. Earlier, it was expected to be October 2024. The merger, which will create one of the biggest airline groups, was approved by the National Company Law Tribunal (NCLT) in June.
In March, Singapore's competition regulator CCCS gave a conditional nod for the proposed deal. Before that in 2023, the deal received approval from the Competition Commission of India (CCI), subject to certain conditions.
"SIA will make the necessary announcement upon completion of the proposed merger or if there are other significant developments", the filing said.