VSNL spurts on Tyco Global deal

DALAL STREET SPIKES

International telephony major Videsh Sanchar Nigam Ltd (VSNL) surged on Tuesday after the company announced on Monday that it had agreed to acquire Tyco Global Network - one of the world's most advanced and extensive submarine cable systems for $130 million.

The stock spurted 7.36 per cent to close at Rs 185.30 on the back of a strong volume of over 2.85 lakh shares on the BSE. The acquisition would give VSNL control over a network that spans 60,000 km (37,208 miles) and three continents.

The acquisition of Tyco International is subject to approval by the governments of the US, India and other countries. Ahead of the announcement VSNL shares had risen 3.3 per cent to Rs 172.60 on Monday.

According to analysts, the acquisition will ensure a diversified revenue stream for VSNL, as its main business of international telephony has been witnessing intense competitive pressure in recent months. Tyco has over 100 clients and 200 employees.