Afrigather After announcing on Wednesday that it has elevated its stake within the Vodafone Group from 9.8% — which it acquired for $4.4 billion in Could — to 11%, the United Arab Emirates telecommunications agency previously often known as Etisalat Group is reportedly contemplating buying Vodafone’s African subsidiary, Vodacom Group.
In response to a report by Bloomberg, the agency, which is Vodafone’s largest shareholder, “is learning the feasibility of a suggestion for half or all of Vodafone’s [60.5%] stake in Johannesburg-listed Vodacom Group Ltd. because it seeks to spice up its worldwide footprint.”
Moreover, Etisalat can be contemplating merging a few of its African operations with Vodacom or buying Vodacom property in particular international locations. In response to Bloomberg sources, different types of structuring the deal are additionally on the desk.
Vodacom’s share worth gained 9.7% on its market open worth following the information, closing at 4.6% larger than its market shut worth the day gone by. This represents Vodacom’s greatest every day acquire since March 2020.
Vodafone at present owns 60.5% of Vodacom. Vodacom was based as a three way partnership in 1993 between Telkom, Vodafone and Venfin. The shareholders owned 50%, 35% and 15% respectively.
In 1996, Vodafone and VenFin offered a 5% stake in Vodacom to a Black Economic Empowerment firm, Hosken Consolidated Investments for R118 million. In 2002, Hosken offered the 5% stake again to Vodafone and VenFin for R1.5 billion.
In 2006, Venfin sold its stake to Vodacom, which means that each Telkom and Vodafone owned precisely 50% of the cellular community operator. In 2008, Telkom agreed to sell 15% of its stake in Vodacom to Vodafone Group in favor of making its personal cellular community operator, 8ta, which was later rebranded to Telkom Cellular. The remaining 15% of its shareholding was distributed to its shareholders by means of an unbundling course of.
What the deal might imply for the African and South African telecoms sector
Vodafone has been steadily consolidating its African operations below Vodacom for the previous couple of months. In September, the UK operator introduced that it had transferred its 55% curiosity in Vodafone Egypt to Vodacom in trade for money and new bizarre shares in Vodacom.
Etisalat buying Vodacom would imply it might mix its operations in seven West African nations which serve over 50 million folks, with Vodacom’s operations in six African international locations which serve over 400 million folks.
If it goes by means of, the deal would make Etisalat one in every of Africa’s high 3 largest mobile network operators, rivaling long-term incumbents South Africa’s MTN Group and France’s Orange.
In South Africa, the deal might encourage MTN and Telkom to rekindle their acquisition talks which broke down in October, as MTN tries to place off Etisalat’s strain within the South African market. Telkom may be extra motivated to take Rain’s merger proposition significantly to attempt to catch as much as the highest operators within the nation.
Nothing is about in stone but
In response to Bloomberg, “deliberations are ongoing and there’s no certainty they’ll result in any transactions.”
“Etisalat’s doable acquisition of Vodafone’s 60% stake in African provider Vodacom could face many obstacles because the governments of Morocco, South Africa, and Kenya — in addition to regulatory and competitors authorities — would wish to log out,” provides Bloomberg Intelligence.
