Vodafone pays $10.9 billion to complete Hutch deal

09 May 2007

London: Europe''s largest telecom operator, Vodafone Plc, has paid a discounted price of $10.9 billion in cash for mobile firm Hutch-Essar to complete its acquisition of Hutchison Telecom International Ltd''s (HTIL) majority stake that gives it access to the rapidly growing Indian market to counter saturation in European markets.

The final price is a reduction of $180 million from the originally agreed price of $11.08 billion, which reflects retention and closing adjustments as agreed with Hutchison.

The adjusted price includes provisions for a previously announced settlement pact with Indian partner Essar. It also includes $352 million retention by Vodafone toward cost and expenses associated with the transactions.

The net cash inflow to HTIL before payment of the settlement amount is about $10.83 billion. HTIL is expected to have an estimated pre-tax gain from the stake sale to be approximately $9 billion. HTIL is expected to declare a special dividend of $HK6.75 per share following the completion of the transaction

Vodafone CEO Arun Sarin said, "I am delighted that, having secured all the necessary regulatory approvals, we are now able to complete this important transaction and move onto the process of integration."

In a statement, Hong Kong-based Hutchison Telecommunications International Ltd (HTIL), which sold its entire stake in the company, disclosed that the transaction had been completed on * May.