India’s Essar Group is to acquire US firm Avaya’s 59.13 per cent stake in AGC Networks for 206 billion rupees ($4.4 billion).
Multinational conglomerate Essar has an interest in communications through Vodafone-Essar, the joint venture of Essar Communication Holdings Ltd and the UK’s Vodafone Group. It says it is one of India’s largest cellular service companies with over 100 million telecom subscribers in India and Kenya, and is the majority stake in the telecom assets of the Dhabi Group in Uganda and the Republic of Congo.
Avaya is a global specialist in enterprise communications systems, software and services. Its unified communications offering includes phones, platforms, gateways and servers, applications and application enablement. AGC Networks, previously known as Avaya GlobalConnect Ltd, is a converged communication system provider focussed on the India and Australia markets.
The deal is subject to customary Indian regulatory requirements and completion of the open offer The acquisition would be done through Essar Services Holdings Ltd (ESHL). Essar Capital Finance Private Limited (ECF) along with ESHL, person in acting in concert with ECF, would come out with the mandatory open offer for an additional 20 per cent stake at a price determined as per the formula specified in the SEBI Takeover Regulation.
Essar’s president of SI business SK Jha said: “AGC Networks is a leading player in the contact centre, unified communications and networking space as a solutions integrator with a roster of marquee clients and cutting edge products.
“It provides a great synergy with our systems integration business. With this acquisition, Essar will gain deep expertise in the ‘enable’ block of experience management that Essar embarked upon through its worldwide expansion drive. Now customers will have the ability to have unified communication and experience management under one roof.
“We look forward to the successful completion of the transaction and welcome the AGC Networks staff, partners and customers and look forward to a very rewarding relationship with them.”
Avaya said the sale of its AGC Networks stake will enable it to drive additional focus on two strategic imperatives: the development of the Avaya business in India, and the growth and extension of its channel coverage model through Avaya’s global channel program, Avaya Connect. It said AGC Networks will remain a key channel partner serving customers in the India market, one of the fastest growing enterprise communications markets in the world, and in Australia.
Avaya India managing director Jangoo Dalal said: “The AGC Networks relationship remains key to Avaya’s success in India and Australia – both through the period of this transaction and beyond.
“In India we work together to serve some of the country’s leading organisations spanning multiple business sectors, and we look forward to continuing to work with AGC Networks as a trusted and well established business partner.”