KEY POINTS:
Vodafone has won the battle to secure control of Hutchison Essar, the fourth biggest mobile operator in India, Vodafone chief executive Arun Sarin announced today.
The deal will cost the British telecoms giant around US$13 billion ($19 billion) in cash and debt.
Vodafone had been thought to be behind in the race to win the deal, having only formally entered the bidding process last month after its chief executive Arun Sarin secured approval for an offer from Indian trade ministers.
But it emerged yesterday that Hutchison Whampoa, the Hong Kong telecoms company owned by billionaire Li Ka-Shing, has decided to sell its 67 per cent stake in Hutchison Essar to Vodafone in preference to three local bidders.
The deal will cost Vodafone US$11 billion in cash and it will assume a further US$2 billion of net debt.
In addition to Vodafone, whose bid valued the company at US$19 billion, Hutchison Whampoa also received offers from two Indian companies, Reliance Communications and the Essar Group. A third Indian company, the Hinduja Group, led the final bidding consortium.
Vodafone will only be able to run the company in partnership with a local operator, because Indian regulations prevent it from holding more than 74 per cent of the company.
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