Millennium Post

Govt lets UK’s Tesco invade India, Vodafone fully own its local arm

A decision on the proposal of private HDFC Bank to increase foreign institutional investor (FII) holding limit was, however, deferred, Finance Ministry sources said.

Tesco Plc's plans to initially invest $110 million in the multi-brand retail foray, including for the acquisition of 50 per cent stake in Tata group firm Trent Hypermarket Ltd.

As regards to Vodafone, the FIPB has given go ahead to the British telecom major to buy out minority shareholders like Ajay Piramal and Analjit Singh in its Indian arm at an estimated cost Rs 10,141 crore.

Piramal holds an 10.97 per cent stake in India's second-largest telecom company by subscribers, while Singh, who is Vodafone India's non-executive chairman, holds 24.65 per cent.

Vodafone Group Plc will pay Analjit Singh Rs 1,241 crore and Piramal Enterprises Rs 8,900 crore for their stakes in Vodafone India as part of a proposal.

However, since the investment is of more than Rs 1,200 crore, the company's proposal also requires clearance from the Cabinet Committee on Economic Affairs (CCEA).

CGP India Investments Ltd, an indirect Mauritian subsidiary of Vodafone International Holdings BV, had sought FIPB approval to buy the stake held by minority shareholders in Vodafone India Ltd.
The Foreign Investment Promotion Board  has also approved foreign investment proposals of Johnson & Johnson.

HDFC Bank's proposal, which was deferred, pertains to raising foreign institutional investor holding limit beyond the existing 49 per cent in the bank.

‘Tesco pleased’ at India’s surrender of national economic sovereignty

New Delhi: The approval by Foreign Investment Promotion Board (FIPB) to the proposal to invest $110 million in the Indian multi-brand retail segment will allow it to work on practicalities of setting up a joint venture with Tata group firm Trent, UK-based Tesco Plc said on Monday.

‘Tesco is pleased that the FIPB has agreed to our proposal. This will now allow us to work on the practicalities of setting up the joint venture with Trent. Any such announcement will be made in the usual way,’ a Tesco spokesperson said.

In 2008 Tesco PLC had announced setting up of a wholesale cash-and-carry business in India, with
an initial investment of up to 60 million pounds in the first two years. It had also entered into an exclusive franchise agreement with Trent to provide expertise and technical capability to support the Indian firm in the running of hypermarket business, under Star Bazaar stores.

US Cooper Tire ends $2.5-bn deal with India’s Apollo Tyres

NEW DELHI: Months after a bitter legal stand-off between Apollo Tyres and US Cooper Tire & Rubber Co over the proposed $2.5 billion sale to the Indian company, Cooper Tire terminated the deal saying the Indian tyre maker had failed to find financing for the transaction, according to a news agency report.

The termination, disclosed in a statement, marks the end of a failed agreement plagued by obstacles from the start. The Indian tyre maker in June agreed to buy Cooper for $35 a share, hoping to transform itself into the world's seventh-largest tyre maker and cut its dependence on domestic sales, the news agency added.

Cooper said it believes the Indian tyre maker 'has breached the merger agreement,' and added it would continue to pursue 'legal steps' to protect the company and its shareholders. Cooper had tried to force the Indian company to complete the deal under the agreed terms, while Apollo sought a price cut of as much as $9 a share, citing Cooper's US labour trouble and disruptions at a Chinese joint venture, as reported by a news agency.

'It is time to move our business forward,' said Roy Armes, Cooper Tire's chief executive in the statement.

'While the strategic rationale for a business combination with Apollo is compelling, it is clear that the merger agreement both companies signed on 12 June will not be consummated by Apollo and we have been notified that financing for the transaction is no longer available,' he added.
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