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NCLT Gives Green Light to Air India-Vistara Merger

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the National Company Law Tribunal (NCLT) has granted approval for the merger between Air India and Vistara. This decision heralds the formation of one of the world’s largest airline conglomerates, poised to reshape the landscape of air travel.

The merger, initially announced in November 2022, has garnered significant attention due to its potential to redefine the competitive dynamics within the sector. With Singapore Airlines holding a 25.1% stake in Air India, and Vistara being a joint venture between Singapore Airlines and Tata Group, the consolidation promises strategic synergies and enhanced operational efficiencies.

In a landmark 31-page order, the Chandigarh bench of the NCLT sanctioned the composite scheme of arrangement involving Talace, Air India, and Vistara, all integral parts of the Tata Group. The tribunal’s decision marks a crucial milestone in the merger process, paving the way for its anticipated completion by the end of this year.

“The approved scheme represents a transformative step forward for both Air India and Vistara,” remarked a spokesperson for the airlines. “This merger will unlock immense value and bolster our collective capabilities to better serve passengers, while also driving sustainable growth in the aviation sector.”

The NCLT’s ruling underscores the culmination of extensive deliberations and regulatory approvals, reflecting the comprehensive due diligence undertaken throughout the merger process. Notably, the scheme has received overwhelming support from shareholders and creditors of both airline companies, in addition to securing endorsements from regulatory bodies including the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA).

Highlighting the significance of the NCLT’s decision, the tribunal’s order emphasized, “The sanctioned scheme shall be binding on the petitioner companies and their respective shareholders.” Furthermore, it outlined the timeline for the dissolution of transferor companies, ensuring compliance with regulatory requirements, including foreign direct investment (FDI) approval and security clearances.

“In accordance with the NCLT order, the companies shall diligently pursue FDI approval from Singapore Airlines and obtain necessary security clearances within the stipulated timeframe,” affirmed the spokesperson.

The conditional nod provided by Singapore’s competition regulator CCCS in March 2024 and the approval from the CCI in September 2023 underscore the meticulous regulatory scrutiny and adherence to compliance standards throughout the merger journey.

Tata Group’s acquisition of Air India in January 2022 set the stage for this transformative merger, reflecting the conglomerate’s commitment to revitalizing the national carrier and fostering innovation within the aviation sector.