Vodafone futher acquires 15% stake in Vodacom (South Africa)
Vodafone is offering $2.4bn for further 15 per cent stake in Vodacom. Telkomthe South African government has given the approval. This marks a big step forward in Vodafone’s strategy of seeking to boost growth through expansion in emerging markets. Under this deal, Vodafone buy the shares from Telkom, the South African state-controlled telecoms company that owns half of Vodacom. This will add to the 50 per cent of shares that Vodafone already holds. An Analyst believes, There’s obviously a control premium in there but it doesn’t look too expensive. The question for Vodafone going forward is how to manage all these separate African assets.
Vodafone is intending to use Vodacom as a hub for businesses across Africa. This deal is dependent 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. Pieter Uys, the incoming chief executive, has sought to assert a pan-African strategy with the proposed $700m purchase of Gateway, a company that provides connections between different African networks. Mr. Uys further said that “gives us a springboard to launch into the continent”. “gives us a springboard to launch into the continent”. Vodacom posted R48bn revenues last year, up 17% on the previous 12 months. It has an estimated 55 per cent market share of the telecoms market in Africa’s biggest economy.
