Air India has proposed to purchase low-cost carrier, Air Asia India, the airline company has also submitted an application for purchasing the shares with the Competition Commission of India, (CCI). The result of this action will witness Air Asia’s exit in its airline venture nine years after it entered India with lofty expectations.
Air Asia already owns 16.33% stake in Air Asia India. Tata Sons holds the remaining stake of 83.7% in Air Asia India. According to the shareholder’s agreement between company and Tata Sons, the latter can acquire the former’s stake directly or through an affiliate.
Air India will purchase 16.3% stake of Air Asia India for Rs. 139 crores. Since Tata Sons already owns the remaining stake of 83.7%, this purchase will help Tata Sons acquire 100% stake of Air Asia India, as Air India is affiliated with the Tatas.
