Vodafone joins race for acquiring Hutch
Friday, 22 December 2006, 18:30 IST
Printer Print Email Email
New Delhi: The battle to buy Hutch - India's fourth largest mobile phone operator - is getting fiercer, with Anil Ambani's Reliance Communications in talks with Malaysia's Maxis Communication for a 100 percent acquisition. The Reliance move comes even as global mobile giant Vodafone, led by its Indian-born chief executive Arun Sarin, officially entered the arena Friday, with its board endorsing the move that is being spearheaded from London. Reliance Communications is also holding negotiations with the US-based private fund - Kohlberg Kravis Robers and Co - to bid for Hutchison Essar, said officials familiar with deal negotiations. "The offer could be in the region of $14 billion," an official said, referring to the valuation that Reliance Communications has in mind for Hutch. The Hong Kong-based Hutchison Whampoa wants to sell its 67 percent stake in its mobile telephone joint venture in which the Essar group owns a 33-percent stake, sources said. In London, the Vodafone board gave 52-year-old Sarin - an alumnus of the Indian Institute of Technology (IIT), Kharagpur - the mandate to negotiate the deal to buy Hutch. "The board of Vodafone continues to believe the mobile market in India has great potential and is therefore considering the acquisition of a controlling interest in Hutch Essar," the global giant said in a statement from London. "Such a transaction would be consistent with its stated strategy of seeking selective acquisition opportunities in developing markets," it added. The relations between Hutchison, owned by Li Ka-shing, a leading businessman from Hong Kong, and the Ruias of the Essar group reportedly turned tense after the former entered Pakistan's telecom business with Egypt's Orascom without consulting the Indian partner, the sources said. The board of directors of Hutch Essar - which has its operations in 16 telecom circles in India with a subscriber base of 19 million - met in Mumbai Friday but could not reach an understanding on the possible future strategy. Interestingly, Vodafone already has a stake in another telecom company in India - Bharti Televentures - totalling 10 percent. Bharti would have to waive a non-compete clause to enable Vodafone acquire the Hutch stake, the sources said.
Source: IANS
siliconindia