Comparison between two Acquisitions

Main Company Name Bharti Airtel Vodafone

Acquired Company Name Zain Africa Hutchison Essar

Company bought for 10.7b $ 13.3b $

Origin country of main company

India London

Origin country of acquired company

Africa India

Current Ranking in India 1st 2nd

Current Subscriber Base in India

243m 141m

Year of acquisition 2010 2007

Both got a new wide market to offer their services to. India , the 2nd most populated country in the world ,

having ARPU of near 4$ is very juicy market for any telecom service while in Africa there is not such intense competition as India , there are not more than 4-5 service providers so having varying ARPU of 8$-12$ except some areas like Kenya and Ghana

Vodafone acquired Hutch which was leading telecom service provider in India in 2007 while Vodafone was world’s number one at that time so it was right to penetrate into Indian market to widen its market.

Airtel acquired Zain Africa which was second choice after MTN but after several discussions Zain Africa turned out to be the better choice, Zain holds the 2nd rank following MTN.

Zain and Hutch both already had established management, units and brand.

Bharti had good cash flow and it didn’t make sense for a company to sit on a pile of cash when it can deploy it in productive assets.

Acquisition on Zain Africa made Airtel world’s 5th biggest operator and gave access to population of 470 million.

BY: Virat AgrawalBBA FB