Vodafone to buy out Essar from JV for $5b

Dylan Bushell-Embling
01 Apr 2011
00:00
News

Thumbnail: 

Vodafone will acquire Essar Group's entire stake in Indian joint Venture Vodafone Essar for $5 billion.

 

The company yesterday disclosed it had exercised its option to acquire 22% of the joint venture, and Essar exercised its own option to sell the remaining 11%.

 

Under the terms of the companies' joint venture agreement, Essar had the option of selling its stake piecemeal at market value or in one go at the predetermined $5 billion price tag. This deal suggests Essar was unable to get a higher valuation for its stake in the venture.

 

clashed

http://www.telecomasia.net/content/vodafone-essar-clash-over-jv-buyout

 

The transaction, expected to be settled by November, will bring Vodafone's direct ownership in Vodafone Essar up to 75%. But Indian law restricts foreign ownership of mobile operators to 74%.

 

To ensure regulatory compliance Vodafone will either sell 1% of the company to an Indian entity, or may consider an IPO for the venture, an Indian finance analyst toldBloomberg.

 

Vodafone Essar is India's second largest GSM operator after Bharti Airtel with a market share of over 23%, according to statistics from regulator Trai.

Source: 

telecomasia.net

Dylan Bushell-Embling

Related content

Comments
No Comments Yet! Be the first to share what you think!