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A major shake-up is on its way in India after Jet Airways agreed to acquire rival Air Sahara in the first consolidation deal since the government opened up the market to new entrants.
The Mumbai-based Jet Airways board met last month and approved the acquisition of 100% of Delhi-based Air Sahara, which is wholly owned by the Sahara Group conglomerate. Specific terms are confidential, but the airline says the all-cash deal is worth around $500 million and that it does not include the assumption of Air Sahara's debts.
The takeover remains subject to government approvals, but most industry observers expect it to receive regulatory clearance as many have been calling for consolidation in the fast-expanding market. Some analysts say mergers among other airlines may now follow.
Air Sahara and Jet Airways are India's largest privately owned carriers with a combined domestic market share close on 50% (see table). Jet Airways is even larger than...