Vodafone completes acquisition of Essar
Indian government approval finally arrives
Posted in Mobile, 9th May 2007 10:39 GMT
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Vodafone has announced that its expansion into India will go ahead with the acquisition of Essar from Hutchison, confirming reports that the Indian finance minister gave clearance for the deal at the end of last week.
Vodafone will pay £5.5bn in cash to Hutchison Telecommunications International.
The deal was announced in March, but an investigation was necessary to confirm that no foreign company owned, or would own, more than 74 per cent of the telecoms company. Such ownership would breach Indian law on foreign investment.
Once the deal is completed Vodafone will have 52 per cent of the company, while Essar Group will be the local partner with 33 per cent. Essar Group will hold 22 per cent of the company abroad, putting it right at the edge of foreign-holding limits; meaning more governmental approval will be needed if Vodafone ever decides to exercise the options it holds on 14 per cent of the company held by Indian partners.
Vodafone chief executive Arun Sarin said: "I am delighted that, having secured all the necessary regulatory approvals, we are now able to complete this important transaction and move onto the process of integration." ®
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