Vodafone has finally released details of its anticipated plan to acquire an additional 15 per cent stake in South Africa’s Vodacom from Telkom SA, in a plan which was first announced last month.
The deal, which is estimated at R22.5 billion (US$2.47 billion), is set to increase Vodafone’s shareholding in Vodacom Group from the current 50 to 65 per cent.
The deal will also see Vodacom, South Africa’s largest cellular network, being registered in the Johannesburg Stock Exchange, while the remaining 35 per cent will be demerged by Telkom to its shareholders.
The Government of South Africa has also agreed that it will retain a minimum shareholding of 10 per cent in Vodacom Group for a period of 12 months after the listing on the JSE.
Vodafone has also committed to maintain the Vodacom brand-name and that Vodacom will be the exclusive investment vehicle through which it will make acquisitions in sub-Saharan Africa (excluding Ghana and Kenya where Vodafone is already present) – which will ensure that the South African government can benefit from any gains.
The transaction will be financed through existing cash resources and committed debt facilities.
The acquisition is subject to, among other conditions, approval by 75% of Telkom’s shareholders and is conditional upon Vodacom Group being listed on the JSE and Telkom demerging the remaining 35% of Vodacom Group to Telkom’s shareholders.
Telkom’s two largest shareholders, the Government of South Africa and the Public Investment Corporation Limited, owning a combined 58%, have irrevocably committed to vote in favour of the transaction and will become significant shareholders in Vodacom Group following the completion of the transaction.