Vodacom to Acquire 55% Stake in Vodafone Egypt for $2.74 Billion
By Alexandra Wexler
CAPE TOWN, South Africa--Vodacom Group Ltd., South Africa's
largest mobile operator by subscribers, said Wednesday that it is
buying a 41 billion South African rand ($2.74 billion) stake in
Vodafone Egypt Telecommunications SAE, the telecom's first
expansion into North Africa.
Johannesburg-based Vodacom said it has agreed to acquire a 55%
stake in Vodafone Egypt by issuing 242 million new ordinary shares
at ZAR135.75 per share and ZAR8.2 billion in cash, subject to
regulatory and shareholder approvals.
Vodacom is majority-owned by Vodafone Group PLC, the largest
mobile and fixed network operator in Europe. As a result of the
deal, Vodafone's ownership in Vodacom will increase to 65.1% from
60.5%. Vodafone also currently holds a majority 55% stake in
Shameel Joosub, Vodacom's chief executive, said he expects the
deal to accelerate Vodacom's medium-term operating profit growth
into double digits. He said the transaction gives the company
exposure to a young, growing and largely unbanked population.
"We see a highly attractive opportunity there... to expand
financial services, especially VodaPay and M-Pesa platforms into
Egypt," Mr. Joosub said of the company's mobile money offerings.
"We've been close to the asset for years in terms of being part of
the Vodafone group," he said.
Vodafone Egypt is the largest mobile network operator in Egypt
with 43% revenue market share and 43 million customers. Vodacom had
123.7 million subscribers across its footprint, which includes
Democratic Republic of Congo, Ethiopia, Kenya, Lesotho, Mozambique,
South Africa and Tanzania, as of March.
Vodafone Group said the sale simplifies the management of its
The acquisition is expected to conclude in the first quarter of
Mr. Joosub said the company's focus will now be on growing its
customers in its current footprint. "This is the end of geographic
expansion," he said.
Vodacom Group also said Wednesday that it had agreed to acquire
a co-controlling 30% stake in South Africa's Community Investment
Ventures Holdings' (CIVH) fiber assets and create a new
infrastructure entity currently dubbed "InfraCo," which will house
assets currently owned by CIVH subsidiaries Dark Fibre Africa and
Vumatel as well as certain Vodacom-owned fiber assets.
Vodacom plans to pay for the transaction with a combination of
ZAR6 billion in cash and the contribution of its fiber-to-the-home,
fiber-to-the-business and business-to-business transmission access
fiber network infrastructure to InfraCo at a valuation of ZAR4.2
billion, in return for new shares in InfraCo.
Vodacom expects the transaction to scale-up the reach of fiber
in South Africa, particularly to smaller and poorer towns.
-Jaime Llinares Taboada contributed to this article.
Write to Alexandra Wexler at firstname.lastname@example.org
(END) Dow Jones Newswires
November 10, 2021 03:28 ET (08:28 GMT)
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