French telecom billionaire Xavier Niel has won approval from India’s competition regulator for his purchase of a 16.2% stake in Vodafone Group Plc, clearing one of the remaining hurdles to a deal that will make him the British carrier’s largest shareholder.
The Competition Commission of India said on Friday that it had approved the acquisition by Vega SAS, the investment vehicle Niel’s family set up to hold the Vodafone shares. Vega agreed in July to buy the stake from Emirates Telecommunications Group Co., the UAE carrier known as e&, for about £4.36 billion ($5.8 billion) in cash. The regulator said a detailed order would follow.
Niel, 59, is the founder of Iliad SA, the French telecom group behind the Free brand, which upended France’s mobile market with low-price plans and now also operates in Italy and Poland. Through his private investment firm NJJ, he controls Ireland’s Eir and Monaco Telecom, and he owns Ukrainian mobile operator Lifecell.
Why India had to approve
The deal needed Indian clearance because Vodafone Group does business in the country through Vodafone Idea Ltd., one of India’s three private mobile operators. Vodafone Group and India’s Aditya Birla Group are the promoters of Vodafone Idea, while the Indian government became its largest shareholder last year, with about 49%, after converting unpaid spectrum dues into equity.
Vega itself has no business in India. It is a wholly owned subsidiary of Maya SAS, a French company linked to the Niel family, and was created solely to hold the Vodafone shares. Niel is buying into the London-listed parent company, not into Vodafone Idea directly, and the approval brings no new money to the Indian operator.
Deals above certain asset and turnover thresholds must be cleared by the Indian regulator before they close. The commission approved the Vodafone transaction on the same day as three Indian deals, including Prosus’s minority investment in Sachin Bansal’s Navi, Aditya Birla Renewables’ purchase of Shell’s Indian clean-energy platform and Adani Energy Solutions’ takeover of smart-meter company IntelliSmart Infrastructure.
A $6 billion bet on Vodafone
Under the July agreement, Vega is buying 3.94 billion Vodafone shares from e& at 110 pence each. The stake carries about 17.1% of the voting rights. Vodafone shares rose about 10% to 108 pence in London after the deal was announced.
The sale ended four years of Emirati involvement in Vodafone. e&, formerly Etisalat, bought a 9.8% stake in 2022 and built it up to 16.2% over the following months, winning a board seat and signing a relationship agreement with the company. Its representative on the board, Hatem Dowidar, resigned when the sale was announced, and Vodafone terminated the agreement.
Niel has said he does not plan to bid for the rest of Vodafone. Vega described the purchase as “a long-term, strategic minority shareholding.”
“Vodafone is ready for a new phase of growth,” Niel said when the deal was announced. “We are confident Vodafone can deliver sustainable growth and strong cash flow generation over the long term.”
The e& shares were sold through off-market block trades to three financial institutions, which hold them until Vega completes its regulatory approvals. The transaction still needs competition and foreign-investment clearances in other markets and is expected to close by the end of the year. Vega has said it would work with the UK government and other authorities during the process.
From minority investor to top shareholder
This is Niel’s second move on Vodafone. In 2022, his investment vehicle Atlas Investissement bought a 2.5% stake in the company. In August this year, Vega told U.S. securities regulators it wanted to open a dialogue with Vodafone’s board and management.
Vodafone has spent the past three years shrinking and refocusing. It sold its Spanish and Italian businesses, gave up its 50% stake in its Dutch joint venture and merged its British unit with Three UK to create Britain’s largest mobile operator. It now focuses on Germany, Britain, Turkey and Africa, where it is the majority owner of Johannesburg-listed Vodacom Group.
The African business gives Niel a route back into the continent’s telecom market. He was previously a backer of Free Senegal, the mobile operator, before pulling out of the country about three years ago.
Figures were converted at $1.3228 to the pound.
Source: www.billionaires.africa
