Vodafone to buy out Essar from JV for $5b

Vodafone to buy out Essar from JV for $5b

Dylan Bushell-Embling  |   April 01, 2011
telecomasia.net
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.
 
The pair had clashed http://www.telecomasia.net/content/vodafone-essar-clash-over-jv-buyout over this issue earlier this year, with Essar accusing Vodafone of trying to prevent it from determining the market value of its holding.
 
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 told Bloomberg.
 
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.
Dylan Bushell-Embling

Bigbox

TelcoStrat 288

TELCO STRATEGIES CONFERENCE
May 7-8, Jakarta
Join telco CxOs from around Asia to discuss:
• Changing the way telcos operate
• New service offerings
• Restructuring for innovation
See the conference agenda >>

Ericsson has been in Asia for more than 100 years and will continue to drive technology and services leadership in order to bring the best mobile experiences to end users

SignUpTAenews

Frontpage Content by Category with Image

Activists petition for the withdrawal of the Newborn-to-Toddler Apptivity Seat

 

Telecomasia.net full website

© 2012 Questex Asia Ltd., a Questex Media Group company. All rights reserved. Reproduction in whole or in part is prohibited. Please send any technical comments or questions to our webmaster.