Tata Sons receive approval to acquire Air India

Air India, along with Air India Express and Air India’s 50 percent Stake in Ground Handling company AISATS was committed to be sold to the Indian conglomerate Tata Sons earlier on in 2021. As a part of the process, the Government of India and the group signed the Shareholding Agreement in October. The transaction is supposed to be closed by the third week of January 2022. 

As a part of the reform agenda of India’s Government, state-owned Air India, which was bleeding ever since its merger with the other state-owned carrier Indian Airlines, had been put on the block three years ago, however, no successful bid process happened, until 2021. The divestment methodology was changed a few times, and eventually, the Tata Sons won the bid at the enterprise value of INR 18,000 Crores ($2.4 billion).

The Competition Commission of India (CCI) on December 20 approved the acquisition of Air India by Talace, an entity affiliated to salt-to-software conglomerate Tata Group. Talace, which is a wholly-owned subsidiary of Tata Sons, has also been allowed by the anti-trust regulator to acquire shares in Air India Express and Air India SATS Airport Services, the CCI tweeted.

“The proposed combination envisages acquisition of 100 percent equity share capital of Air India Limited (Air India) and Air India Express Limited, and 50 percent equity share capital of Air India SATS Airport Services Private Limited by Talace Private Limited (Talace),” the Commission said in an official release.

Commission approves acquisition of shareholding in Air India, Air India Express & Air India SATS Airport Services by Talace (Tata Group) pic.twitter.com/27Mh3GWffZ

— CCI (@CCI_India) December 20, 2021

The regulatory approval comes more than two months after Tata Sons, the controlling entity of Tata Group, won the bid to acquire the debt-ridden Air India.

This move clears another important milestone towards the privatization of Air India. The airline enjoys a 10.6 percent market share on domestic operations inside India.

The non-core assets of Air India, including land and building, valued at INR 14,718 crore ($1.95 Billion), are going to be transferred to Air India Assets Holding Limited and not a part of the transaction. 

Ajay Awtaney

Ajay Awtaney is the Founder and Editor of Live From A Lounge (LFAL), a pioneering digital platform renowned for publishing news and views about aviation, hotels, passenger experience, loyalty programs, travel trends and frequent travel tips for the Global Indian. He is considered the Indian authority on business travel, luxury travel, frequent flyer miles, loyalty credit cards and travel for Indians around the globe.

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