Announcing the deal through a joint statement, Jet Airways Chairman Naresh Goyal and Sahara group Chairman and Managing Worker Subrata Roy said they were "pleased to announce the execution of a share purchase agreement for acquisition by Jet Airways India Limited of the entire capital of Sahara Airlines Limited subject to regulatory approvals.''
Though talks between the two leading private carriers on the subject had been in the air for the last few months, they preferred to term the exercise as discussions on forging a "strategic alliance.'' Shedding its initial coyness and shying away from the talk of buying out Air Sahara, Jet Airways stepped on the gas after Kingfisher Airlines chief Vijay Mallya gave up his efforts, saying $500 million was too high a price. At present, the public sector carrier Indian Airline's market share is estimated to be around 34 per cent, Jet's share at 37 per cent and Air Sahara's is put at 12 per cent.
Addressing a press conference, Air Sahara Vice President Alok Sharma said that Air Sahara's equity value was put at about Rs. 276 crore. Mr. Sharma said there was no timetable set for a total integration as there were a number of processes to be undergone, including approvals and clearances from various government authorities. He said all the 27 aircraft of Air Sahara were on lease but other tangible assets like ground equipment, engines, spares and other inventories would be transferred to Jet Airways. The lease of Air Sahara aircraft was likely to end by 2010 and two new leased aircraft would arrive in February and March.
Sahara group Chairman Subrata Roy, in an internal communication to Air Sahara employees, numbering about 4,400, assured them full job protection. "If the employees find it difficult to work under the new management, the Sahara India Pariwar, in a true family spirit, shall be responsive to any of their genuine difficulties and would take all steps to mitigate their difficulties,'' Mr. Roy said.
Reacting to the acquisition, highly placed sources in the Civil Aviation Ministry said, "Since both are private companies, laws of the land, relating to acquisitions and mergers, will apply to their case. The Department of Company Affairs and the Securities and Exchange Board of India (SEBI) may have a role to play,'' the sources pointed out.
At stake would be two crucial factors — the allocation of parking bays and the arrival and departure slots during the prime time in morning and evening in the four metros — that would favour Jet Airways after the new, rebranded entity comes into existence.