Vodafone has won the long fought bidding war for Indian mobile phone firm Hutchison Essar, buying a controlling 67% stake for $11.1billion (£5.7bn).
Reliance Communications and the Hinduja Group were beaten to the deal for the business, which leaves its owner Hong Kong’s Hutchison Telecommunications with a 16% stake in Essar, but undercut analyst valuations of the company by about $1bn at $18.8bn.
It will allow Vodafone to offset declining user revenues in Europe with the booming mobile business on the Asian subcontinent. Sir John Bond, Vodafone's chairman, said India was "destined to become one of the largest and most important mobile markets in the world".
Vodafone will also take on $2bn in net debt as part of the deal.
The UK operator already owned a small 5.6% stake in another Indian mobile phone compnay, Bharti Airtel. But it said it had sanctioned an option for Bharti Group to acquire the stake on the understanding that the two companies could develop joint network infrastructures.
Vodafone has pursued a similar strategy in the UK recently, announcing its intention to merge 3G networks with rival Orange.