Vodafone shares rise after Indian deal

Vodafone shares were trading higher today after the UK-based mobile phone group won the battle for control of India’s Hutchison Essar.

In a deal reported to be the single largest foreign investment in India’s history, Vodafone beat off Reliance Communications and Essar itself to buy Hutchison’s controlling stake for $11.1bn US (€8.5bn).

It will also assume debt of around $2bn (€1.5bn)and offer to buy the 33% interest in Hutchison Essar owned by Essar Group.

Vodafone chairman John Bond said: “India is destined to become one of the largest and most important mobile markets in the world and this acquisition will enable our shareholders to benefit from our increased investment in this market.”

Hutch Essar had 23.3 million customers at the end of last year, equivalent to nationwide market share of 16.4%.

Investors cheered the deal today, even though some analysts said Vodafone appeared to have paid a high price for the company. Shares were ahead by almost 2% during the first hour of trading.