Vodafone announced today it had finally netted a 67 per cent controlling interest in Indian operator Hutch Essar for $11.1bn cash.The world's biggest mobile outfit outside China won the shares in an auction, reports say, making its third largest ever deal and biggest since the $231bn Mannesman deal in 2000. During the drawn out three-way tussle for Hutchison Telecom International's two thirds stake, murmurs had suggested the final price for Hutch Essar might be as high as $18bn.
Vodafone said this morning it will assume $2bn in debt, bringing its total financial burden on the acquisition to $13.1bn, though the extra debt is a drop in the ocean of the group's overall debt of around $23bn.
Vodafone also said it had signed a memorandum of understanding with Hutch Essar competitor Bharti Airtel over infrastructure sharing, which includes an option for Bharti to buy back Vodafone's 5.6 per cent stake in it for $1.6bn. If Bharti exercises the option Vodafone would maintain a separate 4.4 per cent indirect interest in its partner.
Vodafone chief executive Arun Sarin said: "This announcement is clear evidence of how we are executing our strategy of developing our presence in emerging markets."
Hutch Essar will aim for a 25 per cent share of the Indian mobile market by 2012. The emerging economic powerhouse has so far seen mobile penetration of around 13 per cent, but take-up is expected to grow to 40 per cent in the next five years. î
