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Vodafone Showing Interest in Purchase of Hutchison-Essar

The British cellular provider Vodafone has expressed interest in the purchase of the Indian cellular provider Hutchison-Essar, whose value is estimated at $14 billion and is owned by Hutchison. The news was confirmed by Vodafone.

Vodafone did not mention the sum it intends to offer for the company`s shares but analysts estimate the that company is worth approximately $14 billion. Officials at Vodafone said that they see a large potential in the Indian cellular market, and the purchase of Hutchison-Essar plays into the company`s plans to tap in to developing markets. Vodafone isn`t the only company showing interest in the Indian cellular provider, The Indian communications company, Reliance Communications is also interested in competing in the bid for Hutchison-Essar. In addition news agencies around the world have reported that communication companies from Egypt, Qatar and Malaysia are also interested in the Indian company. There have also been reports that the Blackstone Group might join Reliance`s offer.

Hutchison-Essar is owned by Hutchison Telecom from Hong-Kong (67%) and the Indian company Essar (33%). Due to Indian law that limits foreign ownership of Indian corporations, Indian authorities may prevent Vodafone from purchasing more than 74% of Hutchison-Essar. Hutchison-Essar offers both prepaid and postpaid GSM cellular phone coverage throughout India and is especially strong in the major metros. It is often praised for its award winning advertisements which follow a non-cluttered approach. A recurrent theme is that its message Hi stands out visibly though it uses only black letters on white background.