British Vodafone has confirmed the $11 billion acquisition of the Indian fourth-largest mobile operator Hutchison Essar, thereby securing an important position in the fastest-growing mobile phone market.
Vodafone confirmed on Sunday evening the agreement to purchase a 67% stake, valuing the Indian operator at $18.8 billion, including debt. This is the third most valuable agreement Vodafone has ever concluded, surpassing the offers of three competitors, Indian Reliance Communications and the Hinduja and Essar groups. Vodafone, which has been accused in previous years of overpaying in acquisitions, announced that the agreement met its strict criteria regarding acquisitions and that it would receive shareholder support.
This is Vodafone’s second-largest agreement after the record one in 2000 when it acquired German Mannesmann for €180 billion. "That Vodafone managed to acquire Hutchison Essar without prolonged bidding and at a price below the highest in the range, which was around $20 billion, is positive news," briefly assessed Dresdner Kleinwort analyst Robert Grindle. The number of users in India is expected to reach 500 million by 2010 compared to the 150 million currently in the market, with their numbers increasing by 5 to 6 million monthly. (H)
