NEW YORK (The Deal) -- U.K. mobile phone company Vodafone Group (VOD) on Thursday agreed to buy an 11% stake in its Vodafone India unit after the Indian government lifted caps on foreign ownership of phone companies.
Vodafone, of Newbury, England, would pay Piramal Enterprises, controlled by Indian billionaire Aja Piramal, 89 billion rupees ($1.5 billion) for the shares.
The company late last year won government permission to increase its majority Vodafone India holding as CEO Vittorio Colao continues to reshape Vodafone. Colao has plenty of cash to spend after in February selling Vodafone's 45% stake in Verizon Wireless to Verizon Communications Inc. for about $130 billion.
Last month the company agreed to buy private equity-backed Grupo Corporativo Ono SA, the Spanish leader in high-speed broadband for 7.2 billion euros ($10 billion). In October, Vodafone paid 7.7 billion euros for a majority of Kabel Deutschland Holding, a German cable company.
Those purchases will allow the company to offer customers everything from mobile and traditional Internet access to phone service and entertainment content.
Thursday's sale brings Piramal a 52% return on a two-year investment. The billionaire, who bought the stake in 2012 in two tranches at Rs1,290 per share, is selling the stake at Rs1,960 per share.
"The equity purchase in Vodafone was consistent with our objective of making investments that offer opportunity to generate attractive long term return on equity," Piramal said.
Its shares were up 2.9%, at Rs553.65.
Vodafone first bought a 67% Vodefone India stake in 2007 from Hong Kong conglomerate Hutchison Whampoa Ltd. for $10.7 billion. The Indian telecom was known then as Hutchison Essar Ltd.