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Vodafone overpays to win control of Hutchison Essar, India

Link: Vodafone outbids rivals to win Indian firm | New media | MediaGuardian.co.uk

Vodafone won control of Hutchison Essar, India’s fourth largest mobile phone operator, last night in a deal that valued the company at almost $19bn (£9.6bn). It is the biggest ever foreign deal struck in India and Vodafone’s third biggest acquisition after Mannesmann and Airtouch.

Vodafone is acquiring the 67% owned by Hutchison Telecommunications, which is controlled by Hong Kong- based billionaire Li Ka-shing. The UK group is paying $11.1bn and will assume net debt of $2bn. Vodafone outbid three Indian groups, whose bids are understood to have valued Hutchison Essar at some $16bn

.The price tag is considerably higher than expectations and is likely to cause consternation among Vodafone’s shareholders. The group’s chief executive, Arun Sarin, had said on several occasions that he would not overpay. Last night he insisted he was “delighted” with the deal. Mr Sarin said: “We are proud owners of this business. We have got it at a reasonable price and we are thrilled.”

Whether he overpayed or not, I think it’s still good for them to continue expansion, particularly in that marketplace.

By Ewan

Ewan is Founder and Editor of Mobile Industry Review. He writes about a wide variety of industry issues and is usually active on Twitter most days. You can read more about him or reach him with these details.

One reply on “Vodafone overpays to win control of Hutchison Essar, India”

Well, its been exactly a year and I don’t see any improvements. I remember buying my first Orange sim card 5 years back. Ever since orange was replaced by Hutch and now Vodafone, I’ve had times when i just felt like taking my sim card out of my cell phone and chucking it away. To start with, they discontinued free unlimited gprs, free night calling, increased dropped calls, unattractive schemes and in case of any emergency (we had severe floods in mumbai 2.5 yrs back), its the first network to stop working. The only reason I’s sticking with it because most of my friends and family, who were all orange customers, are on vodafone.

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