The Hindu Business Line : Vodafone completes Hutch buy

New Delhi May 9 After almost 3 months since it first announced the decision to acquire Hutchison Telecom International Ltd's stake in Hutchison Essar, UK-based telecom major Vodafone on Wednesday said that that it has completed the deal. The move comes after the company got the final clearance from the Finance Minister, Mr P. Chidambaram, last week.

Vodafone will pay $10.9 billion in cash to HTIL, instead of the earlier announced $11.1 billion, reflecting retention and closing adjustments agreed between Vodafone and HTIL, said a press release.

Commenting on the transaction, Mr Arun Sarin, Chief Executive of Vodafone, said, "I am delighted that, having secured all the necessary regulatory approvals, we are now able to complete this important transaction and move onto the process of integration. India is a tremendously exciting, fast moving market and I am confident that the Hutch Essar business will make a major contribution to the Vodafone Group over the coming years."

Green signal

The Foreign Investment Promotion Board was investigating whether the deal between Vodafone and HTIL violated the FDI norms. After holding meetings three times to discuss the complex shareholding in the company, green signal was given by FIPB on condition that further equity sales in the cellular company would have to be done after obtaining Government approval.

Mr Ravi Ruia, Vice-Chairman, Essar Group, said, "We are delighted that Vodafone has received all regulatory approvals and has completed the acquisition of Hutchison's shareholding in Hutchison Essar. We welcome Vodafone as our new partner and together we expect to bring to Indian consumers an entirely new experience in mobile telephony. We look forward to building, together with Vodafone, the most valuable telecom company in India."

shareholding

Essar holds 33 per cent stake in the company while Vodafone will have 52 per cent. Mr Asim Ghosh, Managing Director of Hutch, Mr Analjit Singh, Chairman, Max Group, and IDFC will hold the balance 15 per cent. Mr Ruia will be the Chairman of the new company Vodafone Essar, while Mr Sarin will be the Vice-Chairman. Vodafone is expected to unveil its new brand by next quarter.

Meanwhile, consumer organisation Telecom Watchdog, which had filed public interest litigation against the deal, is set to approach the Delhi High Court against the approval given by the Government.

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