Essar to buy controlling AGC Networks stake

The Essar Group has agreed to buy a controlling stake in the communications solution company AGC Networks for $ 44,500,000 as it works to increase outsourcing services.

Essar Group will pay 245 rupees ($ 5.30) a share for the 59.13 percent stake in AGC Networks, U.S. network equipment maker Avaya Inc., and will offer to buy another 20 percent of the shares of AGC, as required by Indian regulations .

The offer price is 12 percent lower than the AGC's Friday closing price of 278.45 rupees in the Mumbai market.

Essar said the open bid for a further 20 percent will cost 780 million rupees. Company officials at a conference said the open offer will be announced in about three weeks.

"This transaction, we can offer a wider range of services," Aparup Sengupta, global head of Essar Group's outsourcing venture Aegis Ltd, told reporters on Sunday.

AGC Networks is focused on India and Australia markets and had annual sales of about $ 100 million, "said Sengupta. The company employs about 500 people.

Sengupta said that there was no plan to merge unlisted Aegis Ltd. with listed AGC Networks.

"We are under no pressure to list (Aegis)," he said.

Edelweiss Capital Ltd. Essar advice on the transaction and also the head of the open offer.