Vodafone clinches £3.4bn Indian buyout

VODAFONE has sealed a long-awaited deal to buy out its partner Essar from their Indian mobile joint venture for $5.46 billion (£3.39bn), ending a highly fractious relationship.

The UK group, which is the world's biggest mobile operator by revenue, will purchase the 33 per cent stake owned by a collection of Essar companies, giving it a majority 74 per cent shareholding in the venture.

The price includes an $880 million payment for Indian taxes, which neither Vodafone nor Essar believe is due and will be returned to Essar if they are proved correct.

The deal is part of Vodafone's strategy to only own assets where it has control, and follows the sale of its stake in Polish operator Polkomtel. Analyst Andrew Hogley at Espirito Santo said the Indian deal was in line with expectations.