(Updates with details and latest share price)
MUMBAI (Thomson Financial) - India's Reliance Communications Ltd. said its
subsidiary Reliance Globalcom acquired UK telecom carrier Vanco Group Ltd. for
$76.9 million (3.27 billion rupees).
In a regulatory filing, country's second-largest telecom operator said the
acquisition will add $365 million (15.5 billion rupees) revenues annually to its
unit through long-term contracts.
The company added that it would pay to acquire "100 percent equity of VANCO
Group and free of debt".
Reliance Communications battled with 12 other bidders including AT&T Inc.,
BT Group and Cable & Wireless, company sources said.
"The acquisition of VANCO is in line with Reliance Globalcom's vision to
create one of the Top 5 Global Datacommunications Enterprises in the world,"
said Anil Dhirubhai Ambani, chairman of Reliance Communications.
VANCO managed network services are available in over 40,000 locations across
163 countries with 90 percent of its revenue from developed markets of UK, U.S.,
France and Germany.
Reliance Communications added that Vanco's customer base, which includes
AVIS, British Airways, Siemens and Virgin Megastores, would increase the tally
of Reliance Globalcom's enterprise customers to over 1,400.
Earlier today, the Reliance Anil Dhirubhai Ambani group company said it had
entered into exclusive talks with South Africa-based telecom company MTN Group
Ltd. for a "potential combination of their businesses".
The company added the negotiations are currently on and the exclusivity
agreement is for 45 days.
Reliance Communications' disclosure comes fresh after rival Indian telecom
player Bharti Airtel Ltd. on Saturday called off merger talks with MTN, terming
the ownership structure proposed by the flagship South African mobile company
"completely unacceptable."
At 2.59 p.m. local time, Reliance Communications shares were down 5.29
percent at 542 rupees on the Bombay Stock Exchange and the benchmark Sensex was
down 1.75 percent at 16,358.24 points.
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