Vodafone strikes deal with Essar

15 Mar 2007

Vodafone says it has reached an agreement with India’s Essar Group which will see it get operational control of India’s fourth largest mobile group, Hutchison Essar. Essar, an Indian conglomerate with interests in steel, oil and shipping, owns a 33% stake in Hutchison Essar, in which Vodafone agreed to acquire the 67% stake for USD11.1 billion last month. Essar had previously demanded joint management of the company, raising fears Vodafone’s plans to break into the world’s fastest-growing mobile phone market would not run smoothly. The deal gives Essar an option to sell its stake to Vodafone for USD5 billion between the third and fourth anniversaries of the deal’s completion, expected in a few weeks. Alternatively, Essar could sell Vodafone Essar shares to Vodafone at an independently appraised valuation. Vodafone added that the Indian venture would be renamed Vodafone Essar and it would market its services in India under the Vodafone brand in due course.

India, Vodafone Group, Vodafone India