comparision between acquisition of vodafone over hutch and airtel over zain

1. 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

2.  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 discussionsZain 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 Agrawal
BBA FB