Vodafone shares climbed to a 15-month high yesterday after it beat rival suitors with an €8.5 billion bid for a controlling stake in Hutchison Essar, India's fourth-biggest mobile phone firm.

The deal gives Vodafone a powerful stake in the world's fastest-growing mobile phone market which will help offset slowing growth in its core European operations. It also earns a €7.5 billion profit for Hong Kong tycoon Li Ka-shing's Hutchison Telecommunications, which sold its 67 per cent stake in Hutchison Essar to Vodafone.

The all-cash deal values the whole of Hutchison Essar at $18.8 billion, including debt, and has high stakes for Vodafone, the world's biggest mobile phone operator by subscribers outside China, which has been accused by some investors of overpaying for acquisitions.

Vodafone shares closed 1.34 per cent up at 151½ pence, after touching a 15-month high of 153½ pence, suggesting the firm had struck the right balance.

"Although near term multiples look high, the growth potential is there to create real value for Vodafone shareholders if they can leverage their brand and operating skills in a very exciting end market," said Wesley McCoy, investment analyst, UK equities, at Standard Life Investments, which has a 1.7 per cent holding in Vodafone.

Standard Life has been a critic of Vodafone chief executive Arun Sarin in the past and was among a minority of investors who voted against his reappointment last year.

Vodafone, which is funding the deal with debt, said the deal meant about a third of its profits would come from emerging markets by 2012, compared with less than 20 per cent currently.

Mr Sarin yesterday said the group was willing to look at more acquisitions in emerging markets.

He hailed the Indian deal as "transformational" for Vodafone and signalled it would consider further selective acquisitions in target markets of Africa, eastern Europe and Asia. "If something comes up that is consistent with our strategy and with our financial criteria, we owe it to our shareholders to look at that," he told industry analysts in London.