UK mobile giant Vodafone has reached an agreement with Hong Kong based Hutchison Telecommunications International Ltd to buy out its 67% stake in in India’s fourth largest mobile player, Hutchison Essar Ltd.
Vodafone's bid of US$11.1 billion was enough to edge out rival bidders, Reliance Communications and the Hinduja Group. Vodafone's bid values entire Hutchison Essar at US$18 billion.
Vodafone hopes to recover its investment in next five years. Vodafone management has also expressed interest in buying out remaining 33% stake from Essar group.
India is world's largest mobile market with over 156 million users and evey month 5 million new users are added.
Hong Kong listed Hutchison stock was down more than 15% after the news broke out. Investors has expected a better price for the stake. Also Hutch India was one of the most successful investment for Hutchison and investors were disappointed from the sale.
On the other hand, Vodafone's stock touched a fifteen month high and closed at 151.25 at the London Stock Exchange. India will now be Vodafone's third largest market after US and Germany.
