The announcement was made on Tuesday.
This means that Vodafone’s holding in Vodacom has now increased to 65 percent, while the Big V will now also realise its long standing aim of taking control of the African operator.
Vodacom was originally set up as a 50/50 joint venture between Vodafone and local carrier, Telkom, creating an attractive asset with strong market positions in South Africa, the Democratic Republic of Congo, Lesotho, Mozambique and Tanzania.
The two firms, which have haggled over Telkom’s exit for some time, will now have to negotiate Telkom’s agreement to unbundle its remaining stake of 35 per cent in Vodacom to Telkom shareholders.
Telkom’s two largest shareholders, the government of South Africa and the Public Investment Corporation, have committed to vote in favour of the transaction and will become significant shareholders in Vodacom, following the completion of the latest transaction.
After accounting for Vodacom as a subsidiary, Vodafone will now fully consolidate Vodacom’s results.
The company has already agreed with the local government that the Vodacom brand will remain visible on the African continent 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.
Vodacom SA also owns 65 shares in Vodacom Tanzania Limited, with a local company, Mirambo Limited owning a 35 per cent stake in the company.
The local shareholders of Vodacom are currently in a tug-of-war with the Tanzania Communications Regulatory Authority (TCRA) over the possible sale of their minority stake in the telecoms firm to a foreign investor company, thus intending to make Vodacom (T) Ltd a 100 per cent foreign-owned.