Vodafone has tabled $2.4 billion to further its interests by 15% stake in Vodacom, positioning the company to take control of South africa’ biggest mobile operator.
Financial Times reported that the bid, which has the approval of Telkom and the South African government, marks a big step forward in Vodafone’s strategy to boost growth through expansion in emerging markets.
A deal would see Vodafone buy the shares from Telkom, the South African state-controlled telecoms company that owns half of Vodacom. They would add to the 50 per cent of shares that Vodafone already holds.
“There’s obviously a control premium in there but it doesn’t look too expensive,” said one South African telecoms analyst who could not be named owing to company rules. “The question for Vodafone going forward is how to manage all these separate African assets.”
Vodafone, the world’s biggest mobile operator by revenue, is relying on emerging markets for growth and is hoping to use Vodacom as a hub for businesses across Africa. It has stakes in mobile phone operations in Ghana, Kenya and Egypt and would be able to exert control over Vodacom’s interests in Lesotho, Mozambique, the Democratic Republic of Congo and Tanzania.
A deal is contingent on Telkom distributing the remaining 35 per cent of its holding to its shareholders. Vodacom’s net debt, which stood at R5.2bn at the end of March, would be deducted from the final price.
Vodafone is expected to fund the transaction from its existing debt facilities and cash, potentially allowing it to steer clear of the turmoil in global credit markets.
Protracted talks have frustrated Vodacom executives, who have bemoaned the difficulty of being answerable to two equally influential shareholders.
By Itnewsafrica.com reporter