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Vodafone Merger Accomplishes 4 Things

The narrow-moat company plans to merge its Indian operation with Idea Cellular.

On March 20,

Without RJio's entrance, we would likely increase our fair value estimate for Vodafone based on expectations of enhanced profitability. However, because of RJio, we still expect a difficult market that will likely negate much of these gains. While International Financial Reporting Standards require immediate deconsolidation of large entities that are likely to be sold, we will not deconsolidate India for Vodafone's almost completed fiscal year that ends March 31. However, we will then model it as an equity investment.

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About the Author

Allan C Nichols

Senior Equity Analyst
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Allan Nichols, CFA, is a senior equity analyst for Morningstar Holland BV, a wholly owned subsidiary of Morningstar, Inc. He covers international telecommunication companies.

Before joining Morningstar in 2004, Nichols spent nine years covering domestic and international stocks for Kirr Marbach & Co., including five years of managing international stocks for the firm, and a year as a securities research assistant for the Indiana University Foundation.

Nichols holds a bachelor's degree in finance, with an emphasis in investments, from the University of Utah and a master’s degree in business administration from Indiana University, with a major in finance and a minor in economics. He also holds the Chartered Financial Analyst® designation.

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