Vodafone Group and India's Essar group reached an agreement to jointly manage a leading Indian mobile phone company in which the British mobile carrier is buying a controlling stake, an Associated Press report said.
According to the Associated Press report, Vodafone CEO Arun Sarin and Ravi Ruia, vice chairman of Essar, signed the partnership deal in New Delhi , laying out the details of how both plan to run Hutchison Essar, India's fourth-largest mobile phone company with about 24 million customers.
Vodafone won a bid last month to buy a controlling 67% stake in Hutchison Essar, a joint venture between Hong Kong-based Hutchison Telecommunications International and the Essar group, the report said.
The stake that Vodafone, the world's largest mobile phone company, is buying for $11.1 billion in cash comprises the 52% equity held by Hutchison Telecom and a combined 15% stake owned by two individual Indian investors.
The deal with Essar, which holds the remaining 33% equity, is important for Vodafone to complete the acquisition because Indian laws do not allow more than 74 % foreign equity in telecommunications.
Vodafone's bid to acquire Hutchison's stake is also pending for approval by the government.
Under the deal between Vodafone and Essar, Hutchison Essar will be renamed Vodafone Essar, a Vodafone statement said.