Vodacom Group on Wednesday announced that has agreed terms with Vodafone to acquire its controlling stake in Vodafone Egypt, one of Africa’s premier telecom operators.
Subject to regulatory and shareholder approvals, Vodacom Group will fund the acquisition of a 55% stake in Vodafone Egypt by issuing 242 million new ordinary shares valued at US$548 million in cash. This values the proposed transaction at circa US$2.738 billion.
“Acquiring a majority stake in Vodafone Egypt would cement Vodacom Group’s position as Africa’s leading techco by advancing our strategic connectivity and financial services ambitions while increasing our total population coverage on the continent to over half a billion people and more than 40% of Africa’s GDP…. We intend to provide an update on our medium-term targets at our full year results, which will be reported in May 2022.” said Shameel Joosub, Chief Executive Officer of Vodacom Group.
Vodafone Egypt is the largest mobile network operator in Egypt with 43% revenue market share, offering a range of integrated telecommunications services including voice, data and mobile money services to 43 million consumer and enterprise customers.
Vodafone Egypt holds a strong network leadership position and is the country’s largest mobile wallet provider through Vodafone Cash. According to the national telecom regulatory authority, Vodafone Cash had almost 90% of mobile wallet transactions as at August 2021.
Vodacom in 2017 acquired strategic stake in Safaricom from Vodafone
Joosub adds: “In 2017 we bought a strategic stake in Safaricom from Vodafone that has proven to be value accretive. We said at the time that we had negotiated an attractive price for Safaricom and we believe this to be the case with Vodafone Egypt. As this is a related-party transaction, we have implemented appropriate governance controls to ensure the transaction was and is negotiated, evaluated and executed on an arm’s length basis.”
Vodacom Group appointed PWC to provide a fairness opinion on the proposed transaction, which will be included in the circular that will be distributed to shareholders ahead of a General Meeting in January 2022 at which minority shareholders will vote on the matter. As this is a related-party transaction, Vodafone, which currently holds a 60.5% stake in Vodacom Group, will be precluded from voting on this at the meeting. Once all of the conditions precedent are met pertaining to the proposed transaction, the acquisition is expected to conclude before 31 March 2022.
READ; Vodacom Acquires Vodafone PLC’s 35% Stake In Safaricom
