Jet acquires Sahara for Rs1,450 crore

12 April 2007

Mumbai: Jet Airways, India''s largest private airline, has agreed to buy out its smaller rival Air Sahara for Rs1,450 crore ($340m), ending months of acrimony and legal dispute, after clearance by a three-member arbitration panel.

The deal was signed after the panel comprising British judge Lord Stein and Supreme Court Justices S P Bharucha and Jeevan Reddy, vetted the draft proposal prepared by Jet and Sahara.
Jet has already paid Sahara Rs500 crore and would make a further payment of Rs400 crore on or before April 20 and the rest will be paid in annual instalments.

"They (Jet and Sahara) have signed an agreement by which Jet takes over all the shares of Sahara for a price of Rs1,450 crores. Five hundred crore rupees was already paid, Rs400 crore would be paid on or before April 20 and the balance in equal annual instalments, beginning March 31, 2008, which will be interest-free," Jet''s counsel, Harish Salve said.

The deal gives the airline a combined domestic market share of about 32 per cent. Both airlines also fly to international destinations.

"This deal is definitely going to be good for the shareholders," Jet Airways founder-chairman Naresh Goyal said, adding that the deal is at a 40 per cent discount to the originally agreed price.

"The big news is that the two airliners have ended their dispute amicably and it''s back in the skies again, as far as Jet is concerned," Salve said.