UAE-based Emirates Telecommunications Corporation (Etisalat) has signed an agreement to acquire 45 per cent stake in India's Swan Telecom for around $900 million.
The deal puts the value of the Indian GSM service provider, which holds telecom licences in 13 circles, at around $2 billion.
The remaining 55 per cent stake in Swan Telecom is held by several entities, including the Dynamix Balwas Group, the promoter company, which is into real estate and hospitality.
"Our entry in India, one of the largest and fastest growing mobile markets in the world today, marks an acceleration of our expansion strategy and brings to us an opportunity which matches the scale of our ambitions. We are truly excited by the partnership with the DB Group and the prospect of building Swan Telecom into a leading telecom operator, emulating the successes we have achieved in similar situations elsewhere," Etisalat Chairman Mohammad Hassan Omran said.
The transaction is subject to certain closing conditions.
Citigroup Global Markets is advising Etisalat on this transaction, while Deutsche Bank is advising Swan Telecom, the company said in a release here today.
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According to telecom analysts, Etisalat will have to seek clearance from the Foreign Investment Promotion Board (FIPB) approval for the investments.
Swan Telecom is in the process of acquiring two additional licenses, increasing its total presence to 15 circles in the country.
This will enable the company to provide a full spectrum of telecom services, including GSM services, covering a population of over 900 million in the country.
"We are delighted to be partnering with Etisalat, a leading operator in international telecommunications. We believe that with Etisalat's operational and commercial expertise and with our knowledge of the Indian market, Swan Telecom has the potential to become a leading force in Indian telecommunications,” Vinod Goenka, Chairman and Shahid Balwa, Managing Director of the DB Group said in the release.
Abu Dhabi-based Etisalat has operations in 16 countries, including Saudi Arabia, Pakistan and Egypt, and was looking at entering the Indian market, which is the second largest in terms of subscribers in the world.