india going global.indd - The IIPM Think Tank

MERGERS & ACQUISITIONS
share and more loyal customers”, Mr. Sharma said. The
deal allows the Air Sahara brand to continue for some
more time after which it would revert to the owners
of Sahara group. Assets of Air Sahara including four
helicopters and the personal Boeing Business Jet of
the Sahara Group Chairman would be carved out and
sold back to Sahara.
The completion of the deal will not affect the existing
3,700 Air Sahara staff. “If required, Sahara will
absorb all employees at the same terms and conditions”,
Mr Sharma added. While Jet Airways is likely to absorb
the pilots, cabin crew and engineers with Air Sahara,
the rest of the staff are likely to be absorbed by the Sahara
group, sources indicated. On the other hand when
asked whether Jet will rename Sahara, and whether
the airline would retrench any Air Sahara employees,
Mr Goyal said he would answer all the questions later.
Reacting to the development, the Jet Airways stock
increased by 3.24 per cent to close at Rs 628.65 on the
BSE on April 12, 2007.
Post Merger Scenario:
Jet Airways, which recently took over the beleaguered
Air Sahara for Rs 1,450 crore, has rebranded the lowcost
carrier `JetLite’. According to Jet, the combined
entity would have a market share of 33 per cent of the
domestic market and a combined FY08 net revenue of
$2.5 billion. However, Jet and Air Sahara will operate
as independent companies and Jet Airways would raise
$400 million to fund overseas expansion.
Jet Airways is also planning to acquire 20 widebodied
aircraft for $2.1 billion. It would comprise 10
state-of-the-art Boeing 777-300 (extended range) and
ten A330-200 Airbus aircrafts.
While the airline has redesigned everything, offering
new products in the fi rst, premier and economy
classes, the airlines also holds options of adding more
aircrafts of each type and have recently signed a deal
for purchase of 10 Boeing 787 Dreamliner with delivery
commencing in 2011, which will cost the company
$1.6 billion. In all, Jet Airways will invest $3.7 billion
in new aircrafts for its aggressive growth strategy for
both domestic and international market. All facilities
offered will be premium and hence a premium will
have to be paid by the passengers but the prices will
be competitive, a senior Jet Airways official said.
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