India's Jet Airways Revives Merger Deal

April 12, 2007
The proposed deal with rival Air Sahara fell through last year because of procedural delays and price differences.

India's leading private carrier Jet Airways revived a merger deal with rival Air Sahara, offering 14.5 billion rupees ($329 million) for an all-cash acquisition, a lawyer said Thursday.

The proposed deal fell through last year because of procedural delays and price differences.

"I'm happy to announce that Jet and Sahara have resolved all their disputes and signed an agreement, which is confidential, but the information that we've given to the Stock Exchange is that Jet will take all the shares of Sahara," Harish Salve, Jet's lawyer, told reporters on Thursday.

The deal was worked out by a three-member arbitration panel.

"There was a dispute that ended amicably. Jet Airways is known for its quality service and not litigation," said Jet Airways chairman, Naresh Goyal.

"There is no change in our thinking. It's still very good commercially for our shareholders," he told reporters.

In January last year, Jet Airways offered $500 million to acquire Air Sahara, but later began haggling over the price. The deal collapsed months later as Air Sahara refused to budge and some regulatory approvals were delayed.

The expected merger would create an airline controlling nearly half of India's domestic aviation market. The combined airline would have a fleet of 89 jets.

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