Vodafone closes Hutch deal, finally
Vodafone completes the acquisition of HTIL's 51.96 per cent stake held in HEL, report M Rajendran and Arun Kumar.Updated: May 10, 2007 04:37 IST
The deal is done. Vodafone on Wednesday completed the acquisition of Hutchison Telecommunications International (HTIL)'s 51.96 per cent stake held in Hutchison Essar Ltd (HEL).
Vodafone will pay $10.9 billion (Rs 44,700 crore) in an all-cash transaction to HTIL, reflecting the retention and closing adjustments agreed upon between Vodafone and HTIL.
Arun Sarin, chief executive of Vodafone, said in a statement, “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.”
Echoing his sentiment, Ravi Ruia, vice chairman of the Essar Group, which holds 33 per cent in HEL said, " We welcome Vodafone as our new partner and together 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."
The Foreign Investment Promotion Board (FIPB) had approved the company’s proposal on Monday.
The FIPB's approval came with a condition. It related to the controversy over the indirect holdings of Asim Ghosh, CEO of Hutch-Essar, and Analjit Singh, co-founder and chairman of Max India. It said Ghosh's holdings of 4.68 per cent, and Singh’s of 7.58 per cent should be compliant with rules relating to FDI in telecom, which decree a 74 per cent cap on foreign holdings.
Said Canning Fok, Chairman of HTIL, “We exit the Indian market as one of the best capitalised telecom companies in the region which will enable us to react swiftly to new opportunities and to accelerate growth in our existing markets. The Company looks forward to furthering its mission to deliver value to shareholders as a leading telecom operator.”