Vodacom has completed the R42bn acquisition of Vodafone’s Egypt operation. This is yet another move by Vodacom’s parent in reorganising its assets under SA’s largest mobile operator.
For Vodacom, the acquisition of Vodafone Egypt, the market leader in the country with more than 40% market share and 38-million prepaid users, will accelerate its medium-term operating profit growth potential into double digits.
“The company confirms that all suspensive conditions contained in the circular have been fulfilled and/or waived, as applicable, consequently the transaction has become unconditional,” the group said in a note to investors on Tuesday.
The deal has been settled through the issuance of 242-million new Vodacom shares worth R31bn and cash of €577m (about R10.806bn). With the transaction complete, Vodafone’s shareholding in Vodacom has increased to 65.1% from 60.5%.
A week ago Vodafone said it was considering selling its stake in Vodacom to Abu Dhabi’s Etisalat.
Vodacom says it expects to consolidate the Egypt operation over the rest of the financial year.
The group says the transaction “presents a unique opportunity” to advance its strategic ambitions.
“Vodafone Egypt is a clear market leader, strategically positioned to capture growth in a fast-growing information and communications technology [ICT] market that is expected to diversify and accelerate Vodacom’s growth profile.”
Vodacom is set to provide investors with guidance on its medium-term growth outlook for the Egypt unit at end-January 2023.
The deal puts Vodacom in a stronger position to challenge its closest domestic rival, MTN, whose aggressive expansion — sometimes in risky markets where others feared to tread — made it the continent’s biggest mobile network operator.
It also hands Vodacom a market of 100-million people in Egypt, where more than 60% of the population do not have bank accounts while mobile phone operators are looking at financial services as the next growth area.
After the acquisition, Vodacom will have access to a population of more than 500-million across the Democratic Republic of the Congo, Egypt, Ethiopia, Kenya, Lesotho, Mozambique, SA and Tanzania, which together account for more than 40% of Africa’s GDP.
In addition to the Egypt transaction, Vodacom is also working to complete its recently inked R13bn deal with Remgro’s Community Investment Ventures Holdings unit to expand its fibre portfolio.
The group recently started operating in Ethiopia, another market with more than 100-million people, through its Kenyan affiliate Safaricom.
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