Essar Group to Buy 59.13% Stake in AGC, Essar Group Stake in AGC, Essar Group Will Acquire 59 Percent Stake in AGC, Essar Group Will Purchase Avaya 59.13% Stake in AGC Networks

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SME Times News Bureau | 31 May, 2010
Diversified business conglomerate Essar Group Sunday said it will acquire Avaya's 59.13 percent stake in converged communication solution provider AGC Networks for Rs.206.19 crore ($44.5 million).

"The Essar Group will acquire Avaya's entire 59.13 percent stake in BSE/NSE-listed AGC Networks for USD equivalent of Rs.206.19 crore, or Rs.245 a share, subject to customary Indian regulatory requirements and completion of the open offer," it said in a statement.

The acquisition will help catapult Aegis, in which Essar Services Holdings Ltd (ESHL) invests, into top-tier of solution integrators (SI) space.

"Essar in a short span has become a key player in the SI space and would benefit immensely from the depth and width of expertise AGC Networks has. We have a definitive plan to grow this business as we aim for bigger chunks of customer spends," said Aparup Sengupta, Aegis' managing director and global chief executive officer.

Essar Capital Finance (ECF) along with ESHL would come out with the mandatory open offer for an additional 20 percent stake at a price determined as per the formula specified in the Securities and Exchange Board of India's takeover regulations.

ECF will make a mandatory public announcement Monday, the statement said, adding that the total size of the open offer will be around Rs.78 crore, assuming that all shares are tendered in the offer.

AGC Networks, earlier known as Avaya GlobalConnect Ltd, is focused on the India and Australia market and employs about 500 people.

"The current management is expected to continue and spearhead the business post-closing," the statement said.

In a separate release, Avaya said the sale of its AGC Networks stake will enable it drive additional focus on two of its 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 programme, Avaya Connect.

Avaya is focused on delivering fit-for-purpose communications systems to the enterprise market. AGC Networks will remain its key channel-partner serving customers in India and in Australia, the statement added.

Edelweiss Capital is the sole advisor to the transaction and is the manager to the open offer.