Vodafone Gains Approval for $1.6 Billion Indian Investment

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Vodafone has secured clearance from the Indian government to but out the minority shareholders in its Indian subsidiary for USD1.6 billion.

Although the government relaxed the rules baring a foreign company owning more than 74% of the mobile network, any deal above that threshold would still need approval. In addition, as it was a sizeable transaction it needed approval from a foreign investment committee.

India's Cabinet has now cleared the transaction after accepting recommendations from the two reviews.

The transaction values Vodafone India at USD10.5 billion

Technically, Vodafone Group currently owns a 64.4% stake in a holding company, also called Vodafone India, and a further 20.1 percent of the mobile network through other uncontrolled subsidiaries.

Other shareholders in Vodafone India include Piramal Healthcare with 11 percent and Max India's founder Analjit Singh owns around 6 percent, with an unspecified stake owned by Analjit Singh, Vodafone India's non-executive chairman.

Piramal Healthcare has said several times recently that it is looking to sell, and only saw itself as a short term investor in the company. It also has a put option that would force Vodafone to buy its stake if a stock market listing does not take place by February 2014.

Vodafone has also indicated that it is willing to consider buying other smaller networks in the country, if the review of the merger rules are favourable.

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Tags: vodafone  India 

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