CORPORATE

Life comes full circle for the Tatas as Tata Sons wins bid to acquire Air India

The Tatas won the bid to acquire debt-laden, State-run Air India, offering Rs 18,000 crore for acquiring 100 per cent shareholding, a senior government official said on Friday. 


A special purpose vehicle (SPV) of Tata Sons – the holding company of the salt-to-software conglomerate – emerged as the successful bidder for the national carrier, said Tuhin Kanta Pandey, the secretary to the Department of Investment and Public Asset Management (DIPAM) – the government department responsible for privatisation. Tata Sons beat SpiceJet promoter to bag Air India. 


The DIPAM secretary said that Tatas’ bid of Rs 18,000 crore included taking over of 15,300 crore of debt and paying the rest in cash. Both the bidders had quoted above the reserve price, he said, adding that the transaction was planned to be closed by December. Mr Pandey added that a group of ministers – comprising Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Civil Aviation Minister Jyotiraditya Scindia – had cleared the winning bid for Air India on October 4. 


The government is selling 100 per cent of its stake in the State-owned national airline, including Air India’s 100 per cent shareholding in AI Express and 50 per cent in Air India SATS Airport Services.


This win marks the return of Air India to the Tatas. Jehangir Ratanji Dadabhoy (JRD) Tata had founded the airline in 1932. It was called Tata Airlines then. In 1946, the aviation division of Tata Sons was listed as Air India, and in 1948, Air India International was launched with flights to Europe. The international service was among the first public-private partnerships in India, with the government holding 49 per cent, the Tatas keeping 25 per cent and the public owning the rest. In 1953, Air India was nationalised. 

Report By