South Africa’s Vodacom has cancelled plans to buy the majority of Neotel’s assets because of “regulatory complexities and certain conditions not being fulfilled”, the operator said in a statement.
South Africa’s Vodacom (JSE:VOD) has cancelled plans to buy the majority of Neotel’s assets because of “regulatory complexities and certain conditions not being fulfilled”, the operator said in a statement.
In early December last year, Vodacom reached a modified agreement with the local fixed-line provider aimed at securing Competition Tribunal approval for their M&A transaction first announced in May 2014, according to a stock exchange filing.
The buyer said at the time that it would acquire “the majority of Neotel’s assets related to its fixed-line business as a going concern, excluding” its spectrum licences. As part of this modified deal, Neotel would “offer a roaming arrangement to all the mobile network operators including Vodacom South Africa”.
It was unclear whether this would have impacted the agreed R7bn (US$446m) price.
The Competition Tribunal had the final say on Vodacom’s acquisition of the Tata Communications-controlled fixed-line player, following approval by the Competition Commission in July and sector regulator ICASA in June. Comp Com had added conditions, most notably that Vodacom could not access Neotel’s spectrum for two years.
Vodacom, which is majority-owned by British giant Vodafone (LSE:VOD), had originally targeted Neotel to accelerate the rollout of fibre-based services throughout South Africa.
But Vodacom said in a statement yesterday that it has agreed with Neotel that the proposed restructured transaction can no longer be progressed.
“It is disappointing that we have reached this conclusion despite all our efforts to find a way to deal with the complexities of the restructured transaction. Our ambition to increase the rollout of fibre-based broadband services to customers remains. We will continue to look for spectrum opportunities, as well as opportunities to accelerate our fixed line business,” Vodacom CEO Shameel Joosub (pictured) said.
A spokesperson for the operator was not immediately available to comment further on the situation.