Vodacom said it expected to seal an agreement on Friday that will see it take full control of its Indian venture after buying an 11% stake from minority shareholder Piramal Enterprises.
Piramal announced on Thursday it had reached a deal to sell its entire ownership of the business to the UK group for 89 billion rupees.
Vodacom has already acquired about 4.5% shares in the joint venture from Indian entrepreneur Analjit Singh, a company spokesman said.
The latest move is in line with Vodacom’s plans announced in October 2013 to acquire the entire stock of Vodacom India Ltd for $1.7 billion, after a rule change to allow networks to take full control of their businesses in the country, as Reuters reports.
Vodafone, which ventured in India in 2007 by acquiring local cellular assets owned by Hutchison Whampoa in an $11 billion deal, controls a total of 84.5% stake in Vodafone India both directly and indirectly. Its Indian venture is the second largest carrier in the country by subscribers and revenue.
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Piramal had taken control of 11% stake in Vodacom India for 58.64 billion rupees. The company is selling its interests to Prime Metals Ltd, which is indirectly owned by Vodafone Group, it said.
According to The Economic Times, Piramal stocks jumped as high as 7.6% in intraday trade on Thursday after reports emerged that billionaire Ajay Piramal sold his entire stake in Vodacom India, making a 50% return on investment in just two years.
But the stocks closed at 2.9% higher yesterday, despite the initial climb.
“The equity purchase in Vodafone was consistent with our objective of making investments that offer opportunity to generate attractive long-term return on equity. I am glad to say that we have delivered against our targeted returns with this investment,†said Piramal.
Piramal Group had initially thought it would leave Vodacom through an IPO in India.
To contact the reporter of the story; Yashu Gola at yashu@forexminute.com
