Vodafone confirms deal with Hutch-Essar for $11.1 bn

 Vodafone has announced acquisition of majority 67 per cent stake in Indian mobile firm Hutch- Essar for $11.1 billion, marking the single largest foreign investment into India - one of the fastest expanding telecom markets.

Announcing the deal that puts the enterprise value of Hutch-Essar at $18.8 billion last night, Vodafone CEO Arun Sarin said: "We are delighted to be deepening our involvement in the Indian mobile market... We have concluded this transaction within our stated financial investment criteria."

Simultaneously, Vodafone offloaded its 5.6 per cent direct stake in India's mobile leader Bharti Airtel to the Bharti Group for $1.6 billion.

Vodafone said it had agreed to buy Hong Kong-based Hutchison Telecom International Ltd's 67 per cent stake in Hutch-Essar for $11.1 billion plus $2 billion in debt, valuing the company at $18.8 billion.

"This is a good price which reflects the premium position of Hutchison Essar as India's leading operator," Essar, which holds 33 per cent stake in the venture, said in a statement.

Vodafone's bid trumped offers by Reliance Communications (RCOM), Essar and the Hinduja Group.

RCOM Chairman Anil Ambani, in a statement, welcomed Vodafone into India, saying: "Vodafone's participation is a further endorsement of the exciting future growth potential, and the progressive policies... In the Indian telecom sector."

Earlier, Bharti Group Chairman Sunil Mittal said that "the Indian telecom sector is one of the most sought after in the world and the (Vodafone) bid is a strong endorsement of the government policy to promote the Indian telecom sector."