Vodafone and Essar have settled a dispute over its Indian joint venture with the UK mobile giant agreeing to buy out its partner in a deal worth $5bn (£3bn).
In a statement released yesterday, Vodafone said it had exercised its put option to buy out Essar's 33 per cent stake in the business. The deal will complete before November.
This marks the end of a rocky alliance between the two companies. Vodafone Essar is the second largest mobile operator in India by revenues.
The UK company paid $10bn when it bought 67 per cent of the group from Hutchison in 2007.
In January, simmering tensions over the so called "put option" broke out into open warfare as Essar accused Vodafone of trying to force it out of the venture at an "artificially" low price. At the time of the deal, the put option was agreed to sell the entire stake to Vodafone for $5bn or sell a smaller stake at an independent valuation.
Through a complex transaction Essar wanted to combine a third of its 33 per cent holding with a publicly listed Indian company to establish a value for its stake on the market.
Vodafone tried to block the move as it feared it would artificially inflate the price and Essar took the matter to the Madras High Court.
Following yesterday's deal, Vodafone said it would sell its stake down to 74 per cent to comply with Indian rules over foreign ownership.Reuse content