Vodafone has sold its indirect stake in Indian telco Bharti Airtel to its holding company, conglomerate Bharti Enterprises, for US$200m.
The UK carrier said in a statement that the sale of its direct stake in Bharti Infotel represents about a 4.2%…
Vodafone has sold its indirect stake in Indian telco Bharti Airtel to its holding company, conglomerate Bharti Enterprises, for US$200m.
The UK carrier said in a statement that the sale of its direct stake in Bharti Infotel represents about a 4.2% stake in Airtel.
The sale follows the Department of Telecommunication’s introduction of a new ‘Unified Licence Regime’, which bars groups from having an interest in more than one licenced telco in the same service area.
Vodafone India is the second-largest mobile operator after Airtel.
Bernstein Research analyst Chris Lane said the sale came as little surprise given Vodafone has wanted to sell it for years.
“The only player they could sell it to was Bharti, and Bharti saw no need to give them any cash,” he said. “If it wasn’t for the government pressure, I doubt this would have happened.”
The UK operator bought a 10% stake in Airtel in 2005 and, in 2007, sold about half of that back to the Bharti group for US$1.4bn after acquiring a majority stake in Hutchison-Essar (now Vodafone India).
Earlier this week, reports suggested that Vodafone had hired Rothschild to review a potential IPO of its business in India, where it is embroiled in a long-running tax dispute with the government. The investment bank’s report is said to be due in August.
Vodafone has considered a partial IPO of its Indian unit for several years. However, the unit’s former CEO Marten Pieters, who stepped down in April, has previously said a listing would not take place until after the tax dispute is resolved.
Vodafone is at the centre of M&A interest, following Liberty Global chairman John Malone’s comment that it would be a “great fit” for the cable giant’s German, UK and Dutch units.
Allen & Overy telecoms head Tom Levine said any Liberty offer would likely be structured as a partial break-up.
In Lane’s view, a Vodafone-Liberty tie-up is “inevitable” in the long run, although the question remains at what price.
