Vodafone, Essar Group lock horns over management
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Vodafone Group and the Essar Group couldÂ lock hornsÂ over the Indian company's demand to share management of Hutchison Essar, a large Indian mobile phone network operator.
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(InfoWorld) - Vodafone Group and the Essar Group couldÂ lock hornsÂ over the Indian company's demand to share management of Hutchison Essar, a large Indian mobile phone network operator. Essar claims it has the right to first refusal for any sale of equity in Hutchison Essar by Hutchison Telecommunications International Ltd. (HTIL), a claim denied by both Vodafone and HTIL. "We want joint management and a partnership of equals," a spokesman for Essar Group in Mumbai said Tuesday. Although the Essar Group would leave the day-to-day management of the company to Vodafone, it wants to be consulted on all strategic decisions, the spokesman said. The Essar Group, which holds 33 percent of the equity in Hutchison Essar, is scheduled to negotiate later this week a shareholder agreement with Vodafone, which hasÂ agreed to acquireÂ a 67 percent interest in Hutchison Essar from HTIL. The Essar Group claims that in its shareholder agreement, it has the right of first refusal if HTIL sells its equity, and that it may use this clause in the agreement to bargain with Vodafone. That view, however, isn't shared by Vodafone CEO Arun Sarin, who last week told reporters that the Essar Group's right of first refusal doesn't apply to its agreement to acquire HTIL's stake. Nor does HTIL agree with the Essar Group. The right to first refusal applies only to the sale of equity by HTIL to local Indian competitors, the company said. The Essar Group is not a portfolio investor in Hutchison Essar and wants a say in running the business, the spokesman said. The arrangement would be similar to the one that the Essar Group had with HTIL and that helped grow the business for Hutchison Essar, he added. While announcing its agreement to acquire a controlling stake in Hutchison Essar, Vodafone also made an offer to acquire Essar Group's stake at the same price per share offered to HTIL. If the Essar Group sells its stake, Hutchison's local partners, which together have a 15 percent interest in Hutchison Essar, will increase their interest to 26 percent, Vodafone said. Current Indian rules restrict foreign ownership in telecom service providers to 74 percent. Vodafone expressed interest, however, in having the Essar Group continue as a joint-venture partner. Indian joint ventures of multinational technology companies have typically ended with the foreign company buying out the local joint venture partner. In 1991, for example IBM set up a 50:50 joint venture with India's Tata Group to meet Indian government regulations restricting foreign ownership in computer companies. When that restriction was eased, IBM bought out Tata's share. Last week, however, the Essar Group said it would not exit from Hutchison Essar and would even be interested in increasing its stake in the mobile phone operator if an opportunity arose, the spokesman said.
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Vodafone Group, the world&#39;s largest mobile-phone operator, said Tuesday it&#39;s not in talks with partner Verizon Communications to bid for Sprint Corp.
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(InfoWorld) - British mobile services operator Vodafone Group will acquire a majority stake in Hutchison Essar, winning aÂ heated bid for controlÂ of the Indian mobile services operator. Vodafone announced late Sunday that it has agreed to acquire companies that control a 67 percent stake in Hutchison Essar from Hutchison Telecommunications International, a subsidiary of Hong Kong's Hutchison Whampoa. Hutchison Telecommunications holds a majority stake in Hutchison Essar both directly and through a joint venture company in which Indian partners hold shares. Vodafone will pay $11.1 billion in cash for the acquisition, along with assuming $2 billion in debt, through its subsidiary Vodafone International Holdings. The transaction is expected to close in the second quarter of this year, and is conditional to Indian regulatory approval, it said. Hutchison's decision came over the weekend, after it evaluated bids from four key contenders including Indian mobile services provider Reliance Communications, the Hinduja Group of the U.K., and Indiaâs Essar Group, which holds 33 percent in Hutchison Essar, according to informed sources. Vodafone will offer to acquire the Essar Groupâs stake at the same price per share it is offering Hutchison, the company said. Indian regulations however do not allow foreign operators to hold more than 74 percent of the equity in an Indian telecommunications service provider. If the Essar Group sells its stake, Hutchisonâs local partners, which together have a 15 percent interest in Hutchison Essar, will increase their interest to 26 percent, Vodafone said. The Essar Group said in its statement late Sunday that it was evaluating an offer from Vodafone to be a partner. The Essar Group has the option to continue as an equity holder in Hutchison Essar or sell its stake along with Hutchison Telecommunications. Vodafone has been seeking Hutchisonâs stake since December last year, and in January the companyâs CEO,Â Arun Sarin visited India to press its caseÂ with the Indian government and business partners here. India is adding over 6 million new mobile subscribers every month. Hutchison Essar had 23.3 million customers as of December 31, 2006, which gave it a 16.4 percent market share. Vodafone also offered Sunday to sell its stake of 5.6 percent in Bharti Airtel, also a large Indian mobile services operator, to another company of the Bharti Group for $1.6 billion, double the price for which itÂ acquired the stake in 2005. It also announced a memorandum of understanding with Bharti Airtel for infrastructure sharing with Hutchison Essar.
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An Indian NGO (non-government organization) called Telecom Watchdog has filed a petition with the High Court of Delhi, alleging that foreign shareholding in mobile services operator Hutchison Essar Ltd. is in breach of the Indian government's regulations on foreign direct investment (FDI).
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Verison and its global partner Vodafone may enter the bidding war for another mobile phone giant, Sprint, The Wall Street Journal reported Tuesday.
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The wide variety of operating systems on mobile phones is hindering the growth of cool mobile Internet applications, according to Arun Sarin, CEO of network operator Vodafone.
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Shares in Vodafone Group Plc, the world&#39;s largest mobile-phone operator, dropped after The Wall Street Journal said the company is considering bidding with US partner Verizon Communications Inc.
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Vodafone Group Plc  has  won the battle for a controlling stake in Hutchison Essar,  India's No. 4 mobile operator, with a bid that values it at  around $19 billion including debt, a source and India's Essar  group said on Sunday.
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Vodafone Group on Monday denied a newspaper report it is considering making a $160 billion bid for its U.S. partner in the wireless phone business, Verizon Communications.
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NEW YORK, December 15  - The worldâs leading mobile-phone operator, Vodafone Group Plc, denied yesterday that it had approved a bid by its partner, Verizon Communications Inc, for Sprint (FON.
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InfoWorld - British mobile services company Vodafone Group has reserved the right to terminate its agreement with Hutchison Telecommunications International Ltd. (HTIL), if a &quot;prohibition&quot; comes in the way of the closure of its&#160;$11.1 billion acquisition&#160;of a controlling stake in Hutchison Essar, an Indian mobile services company.
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Vodafone Group Plc  vowed not to pay "over the top" in the multi-billion-pound battle for India's Hutchison Essar on Wednesday, as the British mobile phone giant said it had crossed the 200-million customer mark.
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Vodafone, the UK-based mobile phone giant, has denied reports that it might be preparing a joint bid with Verizon for Sprint, the third largest US mobile operator.
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LONDON/NEW YORK  - Wireless telecommunications company Vodafone Group Plc  denied a report that it was considering a $160 billion bid for Verizon Communications Inc. , a move that would consolidate ownership of their wireless joint venture.
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A small, rebel shareholder sought to  step up the pressure on Vodafone Group Plc  on Tuesday,  saying the British mobile phone company had no clear strategy  for its stake in U.S. joint venture Verizon Wireless.
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The FTSE 100 was trading lower on Monday despite sharp gains for Vodafone after the UK's largest mobile phone company sealed the $18.8bn battle for control of Hutchison Essar.