Vodafone, Essar Seal Cell Phone Deal

Vodafone Group PLC said Thursday it reached agreement with Essar Group on future strategy for Indian cell phone Hutchison Essar, renamed Vodafone Essar.

Under the plan, Vodafone will have operational control of India’s fourth-largest mobile operator and Essar will have rights consistent with its 33 percent shareholding, including proportionate board representation, Vodafone said.

Vodafone Essar’s products will be marketed under the Vodafone brand, the company said.

Essar Group Vice Chairman Ravi Ruia will become Vodafone Essar chairman and Vodafone Chief Executive Officer Arun Sarin will be vice chairman.

Britain’s Vodafone, the world’s largest cell phone company, bought a 67 percent interest in the Indian company for $11.1 billion in February.

As part of the deal, Essar has an option to sell its 33 percent interest in Vodafone Essar to Vodafone for $5 billion or an option to sell between $1 billion and $5 billion worth of Vodafone Essar shares to Vodafone at an independently appraised fair market trading value between 2010 and 2011.