1. Mumbai, March 5, 2008
WFA/ISA - Global Advertiser Conference 1
Presentation by:-
AMIT SINGH
PAVITRA KUMAR CHAURASIA
SAIM ahmed
Institute of Professional Education & Research
THE HUTCHISON ESSAR
ACQUITION:
VODAFONE’S FORAY INTO AN
EMERGING MARKET

2. MERGER
TRANSACTION WHERE TWO FIRMS AGREE TO INTEGRATE THEIR
OPERATIONS ON RELATIVELY COEQUAL BASIS BECAUSE THEY
HAVE RESOURCES AND CAPABILITIES THAT TOGETHER MAY
CREATE A STRONGER COMPETITIVE ADVANTAGE.
ACQUISITION
A TRANSACTION WHERE ONE FIRM BUYS ANOTHER FIRM WITH
THE INTENT OF MORE EFFECTIVELY USING A CORE
COMPETENCE BY MAKING ACQUIRED FIRM A SUSIDIARY
WITHIN ITS PORTFOLIO OF BUSINESSES.
Acquisitions & Mergers

3. Introduction About Hutch ESSAR
HEL was one the fourth biggest player in the Indian telecom
sector.
It is the joint venture between HTIL and the ESSAR.
Started its services in 1994 under the brand name ‘Hutch’
In the year 2000, the company introduced ‘Orange’ brand in
Mumbai while continued operation in the rest of the country under
the brand name of ‘Hutch’.
On February 5 2005 HEL consolidated its business under a single
entity called Hutchinson Man Telecom Ltd.

4. Hutch Essar was a leading Indian telecommunications
mobile operator with :
•23.3 million customers at 31 December 2006,
•representing a 16.4% national market share.
CONTD…
Wherever you go, our network follows”.

5. The name Vodafone
comes
from Voice data
fone, chosen by the
company to "reflect
the provision of voice
and data services
over mobile phones.“

6. Vodafone
 Vodafone started as Racal
Vodafone in 1982.
 It was renamed Racal
Telecom in 1988.
 Racal Telecom was de-
merged from Racal
Electronics and named the
Vodafone Group in 1991.
 On 29th June 1999Vodafone
completed acquisition of Air
touch communications.
 On 28th July 2000, it
reverted it to former name,
Vodafone Group plc.
 In 2006, GOI raised the FDI
limit in the telecom sector
from 49% to 74%.
 Indian mobile market grew
at a rapid pace.
 Indian mobile customer
base has been growing at the
rate of five to six million
every month.
 Because of large rural
market.
Why India

8. TYPE LIMITED
FOUNDED 1994 AS HUTCHISON ESSAR
HEADQUARTERS MUMBAI
INDUSTRY MOBILE
TELECOMMUNICATION
PRODUCTS MOBILE NETWORKS,
TELECOM SERVICES
OWNER Vodafone (67%), ESSAR(33%)
EMPLOYEES Above 10,000

9. Operator Subscriber base
Bharti Airtel 118,864,031
Reliance
Communications
93,795,613
Vodafone Essar 91,401,959
BSNL 62,861,214
Idea Cellular 57,611,872
Tata Teleservices
57,329,449
Aircel 31,023,997
Spice 4,875,913
DOCOMO 3,042,741
All India 525,147,922
Position Of Vodafone
Essar in India after
acquisition of Hutch
(Rank 3rd from 4th )

10. ACQUISITION DETAILS
 Enterprise value of Hutchison Essar is $18.8 billion.
 Value of 67% stake in Hutch Essar - $11.1 billion.
 Vodafone is selling 5.6% stake in Bharti for $1.6 billion.
 Vodafone will retain 4.4% in Bharti as pure financial
investment.
 Vodafone acquired 10% in Bharti for $1.5 billion in Oct
2005.
 Vodafone and Bharti to share infrastructure.

11. BRAND IMAGE AND
RECOGNITION
GLOBAL PRESENCE
POSITIONED AS A LEADER
BETTER SERVICES
FAILED TO ESTABLISH
DOMINANT POSITION IN
DEVELOPED MARKETS
RISE IN FDI LIMITS
ECONOMIC GROWTH LEADING TO
HIGH INCOME IN INDIA
MARKET SIZE OF INDIA (RURAL
MARKET)
NETWORK SHARING AGREEMENT
WITH BHARTI AIRTEL
STIFF COMPETITION FROM
LOCAL PLAYERS
AIRTEL ENTERING INTO RURAL
MARKET
APPROVAL TO RELIANCE FOR
GSM SERVICES

12. Challenges
 The Major challenge for Vodafone was the Domestic Players
like: Bharti Airtel, Reliance.
 The main challenge for Vodafone to expand into Rural Areas.

13. CONCLUSION
 Win-win-win situation for shareholders, employees &
the environment.
 Improved relationships between stakeholders & has
helped to ensure future growth.