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. Last Updated: 07/27/2016

Vodafone Beats Altimo for Hutch

BARCELONA, Spain -- A deal on Sunday gave Vodafone a powerful stake in the world's fastest-growing mobile phone market which will help offset slowing growth in its core European operations.

Vodafone shares climbed Monday after the British mobile phone giant beat rival suitors, including Altimo, with an $11.1 billion bid for a controlling stake in Hutchison Essar, India's fourth-biggest mobile phone firm.

The deal is also a high-stakes move from the world's biggest mobile phone operator by subscribers outside China, which has been accused by some investors of overpaying for acquisitions.

Vodafone said the deal meant about one-third of its profits would come from emerging markets by 2012, compared with less than 20 percent currently.

"This acquisition is in the largest high-growth market in the world, where it is possible for us to acquire control," CEO Arun Sarin told analysts.

He said that only about 13 percent of India's population of 1.1 billion had a mobile phone, compared with about 40 percent in China and penetration rates of 100 percent in some parts of Europe.

The deal is Vodafone's third-biggest ever and it beat three rival suitors for the stake, India's Reliance Communications and the Hinduja and Essar groups.

"This begins to answer our key bear issue with Vodafone -- the lack of emerging market exposure," Investec Securities said in a research note.