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HUTCHISON ESSAR

ACQUISITION BY VODAFONE

1. Presentation of the deal

In May 2007, Vodafone, the world’s leading mobile communications group with operations in 25 countries, acquired 100% of CGP Investment Limited, a company which owns 67% of Hutchison Essar, from Hutchison Telecommunications Limited. Hutchison Essar was, at that time, the fourth largest mobile operator in India with 16.4% market shares and 23.3 million subscribers. It was also characterized by good financial performance. Revenues grew by 51% in 2006, EBITDA margin was 30% in the six months to 30 June 2006.

Vodafone paid $ 11.1 billion for the deal, thus valuating the company at $ 18.8 billion. Vodafone will assume a net debt of $ 2.0 billion. Vodafone financed the acquisition partly with its huge cash reserves (see appendix for more details on the financing of the deal).

Following the acquisition, Vodafone sold its 5.6% direct shareholding in Bharti Airtel, the leading mobile operator, due to a......

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Approximate Word Count: 3595
Approximate Pages: 15 (250 words per double-spaced page)

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