Vodafone Seals Indian Deal

As expected UK-based global mobile operator Vodafone has today announced the finalisation of its buy-out of a controlling stake in the fourth largest Indian mobile company, Hutchisson-Essar. In the end, the British company paid US$10.9 billion, some US$900 million less than originally forecast.

The reasons for the lower price are said to include provisions for the previously announced settlement agreement with the Essar Group, the receipt of interest from Vodafone and various transaction cost and expenses.

Arun Sarin's company can now begin to implement its strategy in the Indian market, which is currently seeing over five million new mobile customers sign up every month. The company, currently trading as Hutch-Essar will be re-branded as Vodafone-Essar, though this will not kick in immediately.

The final barrier to the deal was removed at the weekend when the Indian government sanctioned Vodafone's plan to purchase companies that control a 67% stake in Essar. The Indian Finance Minister, Palaniappan Chidambaram, signed the deal, after the country's foreign investment regulator gave Vodafone's bid the go ahead. The Government's approval followed a two-month inquiry into the legitimacy of the company's shareholding structure.