South African telecom group, Vodacom Group, has received approval from shareholders regarding its proposed acquisition of a 55-percent controlling stake in Vodafone Egypt, the largest mobile network operator in Egypt in terms of active subscribers.
Commenting on the development, Shameel Joosub, the head of Vodacom, said the acquisition will be transformational in terms of Vodacom Group’s evolution from a telco to a tech-co.
“This is a transaction that presents significant diversification and growth opportunities for our shareholders,” he said.
He noted that the deal will not only shift the group’s operations into tech company territory, but also present it with growth opportunities beyond its key markets, giving it an extra edge over competitors.
Vodacom Group Limited is a South African telecommunications company, providing voice, messaging, data and converged services to more than 129.9 million customers.
The telecom group is led by Joosub, who holds a beneficial 0.1-percent stake in the company valued at R208.9 million ($13.5 million).
Joosub’s statement comes nearly two months after Vodacom announced plans to acquire a controlling stake in Vodafone Egypt from Vodafone Group Plc in a deal valued at €2.722 billion ($3.08 billion) on a debt and cash-free basis.
The approval from shareholders moves the group forward in its expansion plans, as it awaits approval from the regulatory authorities of the Johannesburg Stock Exchange, National Telecom Regulatory Authority of Egypt and Egypt’s Financial Regulatory Authority.
The deal is expected to be completed by the end of Vodacom’s financial year in March 2022. Based on Vodafone’s 55-percent share of the net debt in Vodafone Egypt as of Sept. 30, 2021, the total equity consideration is €2.365 billion ($2.69 billion).
Approximately 80 percent of the purchase consideration, about €1.892 billion ($2.14 billion), will be settled through the issuance of 242 million new ordinary Vodacom shares to Vodafone at an issue price of R135.75 ($8.81) per share.
As a result, Vodafone’s ownership stake in Vodacom will rise from 60.5 to 65.1 percent.
