The Week in Review for 21 May 2010

The Week in Review for 21 May 2010
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First Published: Fri, May 21 2010. 11 16 PM IST
Updated: Fri, May 21 2010. 11 16 PM IST
The contest is over and the biggest winner is the government of India. After 34 days and 183 rounds of bidding, the auction for 3G spectrum finally came to an end on Wednesday. No company won a nation-wide license, but the government didn’t complain. It’s going to make about Rs70,000 crore, twice what it initially expected.
Three telecom companies managed to bag thirteen telecom circles each, which is the maximum number allowed. Bharti agreed to pay Rs12,300 crore for its 13 circles. Aircel’s tab was at Rs6,500 crore. Reliance Communications’ will cough up Rs8,600 crore. Meanwhile, two other companies, Tata Teleservices and Vodafone Essar, got spectrum in nine circles. The government divides India into a total of 22 telecom circles for which operators have to bid separately.
After months of bad news, the troubled Bank of Rajasthan finally located a buyer this week. On Tuesday it announced it would merge with ICICI Bank in a deal that analysts estimate is worth Rs3,000 crore. As part of the agreement, Bank of Rajasthan’s shareholders will get 25 ICICI shares for every 188 shares they hold. Most analysts Mint spoke to say the deal is favourable to Bank of Rajasthan.
But while it may have landed a great deal, Bank of Rajasthan’s troubles are not over. A merger with ICICI Bank will require approval not just from the RBI, but also from the government. That’s because ICICI is now classified as a foreign bank and needs a green light from the Foreign Investment Promotion Board.
In pharmaceuticals, On Friday Piramal Healthcare agreed to sell its local formulations business to US multinational Abbott. The deal is worth $3.32 billion. Abbott will get around 350 of Piramal’s generic drugs along with more than 5,000 employees and a factory in Himachal Pradesh. Chairman Ajay Piramal says cash from the sale will be pumped into research and into existing businesses like those for over the counter drugs.
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First Published: Fri, May 21 2010. 11 16 PM IST