South African telecommunications company Vodacom Group has agreed to acquire a strategic stake in Community Investment Ventures Holdings (CIVH), a holding majority-owned by South African billionaire Johann Rupert’s Remgro Limited.
Rupert holds a 57-percent indirect stake in CIVH through Remgro.
In line with the terms of its strategic partnership with CIVH and its acquisition of the stake, the telecom company will acquire a co-controlling 30-percent equity position in the new entity alongside Remgro, which will comprise assets including Vumatel and Dark Fiber Africa.
Assets belonging to Vumatel and Dark Fibre Africa will be transferred to the newly formed entity together with certain Vodacom-owned fiber assets.
The deal will see Remgro partner with Vodacom Group through CIVH, while the South African telecom company is expected to inject R6 billion ($390.4 million) into the new entity and sell its fiber business to CIVH at a valuation of R4.2 billion in return for new shares in that company.
Upon the completion of the transaction, Vodacom will hold a 30-percent position in the CIVH fiber company, with CIVH retaining the balance in the business.
The deal aligns with the company’s commitment to transform the South African fiber business and accelerate the purpose-led group’s ambition to connect people for a better future.
The transaction will directly benefit the general public. It will open access to Vodacom fiber networks that will combine Vumatel and Dark Fibre Africa operations and Vodacom’s fiber assets. This will enable broader access to the Internet and add to CIVH’s open-access fiber network.
The new capital will enable CIVH to accelerate and expand its fiber-to-the-home products in all market segments, especially as pertains to lower and middle LSM product offerings.
These products deliver high-speed affordable access to a much larger segment of the population, including small and medium enterprises.
In line with CIVH’s aim to positively and tangibly impact the quality of people’s lives in South Africa, CIVH’s continued expansion into underserved areas and lower LSM homes will assist in narrowing the “digital divide” by providing previously unserviced homes with Internet connectivity.
As of yesterday evening, shares in Remgro were worth R135.33 ($8.81), 42 basis points higher than its opening price yesterday morning.
Meanwhile, Vodacom shares increased by 2.87 percent in yesterday’s trading session due to investor buying interest on the local bourse.
