Top > Business > 2007 > January > 2007-01-11

Vodafone Makes Bid for Purchase of Indian Hutch-Essar

Vodafone, the largest cellular carrier in the world, has made a bid to purchase the Indian cellular carrier Hutch-Essar, estimating the company value at $17-$18 billion, the Financial Times reported Thursday. The paper said he bid was given to the company`s main stockholder Hutchison Telecom, which is owned by the Hong Kong conglomerate Hutchison Whampoa Limited. The paper added that Vodafone may add $2 billion to the purchase price due to the company`s eagerness to expand into the world`s fastest growing cellular market.

Yet the deal might fail due to Essar`s bid to purchase the company. Essar, a conglomerate that mainly deals in the energy market, owns 33% of Hutch-Essar and is interested in purchasing the remaining 67% of the company for $11 billion. Essar has an advantage over the rest of the competitors as it can refuse the sale of Hutchison Whampoa Limited portion of the company. It has been reported that Ruia family members, who own Essar, have held consultations with Vodafone officials last week.

The Financial Times reported that not only Vodafone and Essar are interested in the purchase of Hutch-Essar. Reliance Communications, India`s second largest cellular carrier, has expressed interest in the purchase of Hutch-Essar, India`s third largest cellular carrier. Executives in Hutchison have confirmed the reports that they have been contacted regarding the sale of the company. Hutchison has previously refused to sell the company for $13.5 billion to the investment groups Texas Pacific and Maxis.