Sarin targets Hutch in India

Arun Sarin’s interest in India’s fourth-largest mobile operator, Hutchison Essar, was confirmed Friday morning as Vodafone admitted it was looking for a controlling stake in the company.

In a statement Friday morning, the UK mobile phone group said: “The board of Vodafone continues to believe the mobile market in India has great potential and is therefore considering the acquisition of a controlling interest in Hutchison Essar… such a transaction would be consistent with its stated strategy of seeking selective acquisition opportunities in developing markets.”

Vodafone earlier this week, sold off its interest in Switzerland as part of its strategy of exiting mature markets where it does not have a majority holding.

The emerging markets spin off of Hong Kong conglomerate Hutchison Whampoa did not name the other interested parties but the confirmation follows a week of speculation.

Rival Indian operator, Reliance Communications, has also been in the picture for some time. The company is reportedly considering a joint bid for Hutch Essar with Maxis Communications.

Reports suggest that Reliance has proposed a merger with the Maxis Indian unit Aircel. The rumoured price tag for Hutch has been set at around $14bn (£7.13bn) with Reliance supposedly receiving backing from US private equity funds.

As of the end of September Reliance controlled around 16 per cent of the Indian mobile market while Hutchison Essar controlled around 11 per cent. Bharti Airtel is the market leader with 21 per cent market share meaning that an acquisition by Reliance could propel the company into the lead.

Egypt’s Orascom Telecom, which owns 19.7 of Hutchison Telecommunications International, is also said to be interested.

In the summer of this year, India overtook China as the world’s fastest growing mobile market in terms of net adds per month, with the country now netting over 6 million subscribers per month.