New Delhi: For the first time Anil Ambani has made very public his intentions for buying Hutch Essar. He said that the acquisition would gel well with Reliance's operations.
With this declaration of Anil, Reliance on Thursday formally joined the battle to acquire India's mobile major Hutch-Essar.
Reliance Communications is now pitted against compatriot Essar and UK's Vodafone, which has reportedly valued the JV at $17-18 billion.
Reliance jumped into the fray two days after Vodafone's CEO Arun Sarin and Ravi Ruia, Vice Chairman of Essar, held parleys in Hong Kong with the top brasses of Hutchison that holds 67 per cent in Hutch-Essar.
Though Essar has not announced its entry in the race, it has reportedly offered about $11 billion to buyout the foreign partner in Hutch-Essar, where it has 33 per cent stake.
While Vodafone can enter the venture by just buying out Hutchison's 67 per cent stake, Reliance would have to acquire the entire venture to overcome the regulatory issues.
But Ambani was confident that all regulatory norms would be adhered to.
He said that the deal was a potential growth opportunity for the company, given its keen interest in entering the GSM segment of mobile telephony as opposed to its presence only in the CDMA market today.
Putting forward the argument that "in-country" consolidation could unlock better value for stakeholders than a foreign player taking over Hutch-Essar, Anil said going by the current valuation, synergy would hold the key.
He also said that though the war chest is building up for a potential buy out, completion or timing of the deal are not certain. "Global financial powerhouses are backing Reliance Communication on funding the acquisition."
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