The tussle between Hong Kong-based Hutchison Telecom and Essar has finally ended with the joint venture Hutchison Essar announcing that it has entered into a binding conditional termsheet for the acquisition of BPL Mobile Communications (BPL Mumbai) and BPL Mobile Cellular (BPL Cellular).Hutchison Essar will pay approximately $1.15 billion (over Rs 5,000 crore) for these transactions, which includes the cash consideration and assumption of debt. Further, the company has announced that it has entered into a conditional agreement to acquire Essar Spacetel Ltd (Essar Spacetel), a company that has applied for licences in seven circles not presently serviced by Hutchison Essar. These seven circles are Madhya Pradesh, North East, Himachal Pradesh, Bihar, Orissa, Assam, and Jammu and Kashmir.Essar had bid for these seven circles in December 2004 and the company is expecting to get these circles in a month. Initially, Hutch was kept out of these seven circles.Top Hutch executives had called this a “hostile act” at that time. While Essar had said Hutch was not interested in these seven circles. Hutchison Essar will pay approximately US $ 6 million in cash for Essar Spacetel. With this deal, Hutchison Essar will now have a presence in all the 23 circles in India.When completed, these acquisitions will immediately hike Hutchison Essar’s customer base to more than 120 lakh, and will leave it poised to become the premier pure play national mobile telecom operator.THE DEAL• Hutchison Essar, in which HTIL owns 53 per cent, is buying BPL Mobile Comm & BPL Mobile Cellular, which have a combined 2.8 million customers, for $1.154 bn including assumed debt• BPL Mobile Communications is the second-largest operator in Mumbai, where HTIL already operates. BPL Mobile Cellular operates in Maharashtra, TN and Kerala
