India's FIPB Approves Vodafone's Hutchison Essar Deal
May 04, 2007
UK Vodafone's proposal to acquire a controlling stake in India's Hutchison Essar has been cleared by the regulatory authority FIPB (Foreign Investment Promotion Board). The FIPB decreed that Vodafone's 52% stake in Hutchison Essar combined with 22% controlled by overseas firms meet the upper limit of 74% foreign direct investment allowed by the Indian government. The FIPB's approval comes with a condition that minority shareholders cannot sell their stakes without the government's permission, in order not to tip the balance. Vodafone's acquisition deal, estimated at US$11.1 billion, now awaits the finance minister's formal approval.