Madras high court approves Essar Group firms' merger

Essar Group firm India Securities said on Thursday the Madras high court has approved its merger with another group firm that owns an indirect 11% stake in a local mobile joint venture with UK's Vodafone.

Vodafone said in a statement it was "disappointed" by the court's decision to approve the merger of the Essar firms, but added it would not affect a separate deal to buy out Essar from the joint venture.

Vodafone and Essar had locked horns this year over the planned merger of the two Essar Group firms, with the former saying India Securities' value may be inaccurately used to calculate the value of their joint venture Vodafone Essar.

But late last month, Vodafone said it will buy out Essar's 33% stake in the joint venture for $5 billion and both the sides have said they expect to close the deal by November.

Essar Group, which had earlier said that Vodafone had nothing to do with the planned merger of the two Essar Group firms as it was neither a shareholder nor a creditor to the companies, said on Thursday the court decision vindicated its earlier stance.

"The objections filed by Vodafone were intended to delay the merger, and serve their own commercial interests to prevent the discovery of a fair market value of Vodafone Essar Ltd through a market mechanism," Essar Group said in a statement.