Idea Cellular, India’s fifth largest cellular operator, said that it would take a 40.8% share in Spice Communications at Rs.77.30 ($1.8) per share.

Idea said that its merger with Spice would be a share-swap arrangement. The deal would provide Spice shareholders with 49 Idea shares per 100 Spice shares.

Further, Idea and Telekom Malaysia will jointly propose to acquire another 20% share in Spice, worth Rs.77.30 per share. Telekom Malaysia has 39.2% share in Spice.

Telekom Malaysia will buy Idea shares at 14.99% share on a preferential basis at Rs.156.96 ($3.6) per share. As part of the deal, Idea will also pay a non-compete fee of Rs 5.44 billion ($126m) to Spice promoters.

The discussions between Idea, Telekom Malaysia and Spice have been continuing for more than a month. Currently, Spice has its operations in Punjab and Karnataka, two territories where Idea does not have any presence and has more than four million subscribers to its credit. X