I’m a Hutch subscriber and was kenly following the bidding war for Hutch for some time. When it seemed that the Ruia’s of Essar group would clinch the deal for Hutch, out comes the news that UK-based mobile company, Vodafone acquires the 67% controlling stake in Hutchison Essar that the Hong-Kong based co. Hutchison Whampoa had put up for sale.
Mobile telecoms giant Vodafone has won the $18.8bn (£9.6bn) battle for control of India’s Hutchison Essar, and immediately faced the prospect of a power-struggle with its new minority partner.
Vodafone fought off bids from Reliance Communications, the Hinduja brothers and Essar itself to buy Hutchison’s 67pc-controlling stake for $11.1bn in cash and assume $2bn in debt, giving Hutchison Essar an enterprise value of $18.8bn.
It seized victory from its rivals last night after just the first round of bidding – and received the news by telephone following a board meeting of Hutchison Telecom yesterday in Hong Kong.
Vodafone have reportedly also asked the Essar group – which holds 33% currently – to be its partner. A move which is necessary considering the Indian FDI norms. It remains to be seen whether Essar woul accept the partership or go all alone. Another question doing the rounds is whether Vodafone will divest its stake in Bharti Airtel?
For the end-consumer like me, all it matters is whether we are getting good service and value-for-money or not. While all this news started making the rounds, I couldn’t help noticing that Hutch has the highest ARPU (average revenue per user) amongst all mobile service providers in India! Guess thatz one of the reason the valuation of Hutch which started off in the range of $7-8 Bn zoomed off and finally culminated in a net-worth of $19.3 Bn!?!
P.S: Would the entity will be now called Hutchfone or even Vodatch . Guess they’ll settle for Vodafone Hutch
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