South Africa’s Vodacom is raising its stake in its Tanzanian subsidiary from 65% to 82.2% for R2.46bn (US$243m) after agreeing to buy almost half of minority shareholder Cavalry Holdings.
Vodacom will purchase new shares in Cavalry with cash, which…
South Africa’s Vodacom is raising its stake in its Tanzanian subsidiary from 65% to 82.2% for R2.46bn (US$243m) after agreeing to buy almost half of minority shareholder Cavalry Holdings.
Vodacom will purchase new shares in Cavalry with cash, which will equate to 49% of the vehicle. This will give the South African group an additional indirect 17.2% interest in Vodacom Tanzania.
Cavalry will maintain a 17.8% stake in the Tanzanian mobile operator.
Vodacom said it wanted to boost its stake in the subsidiary to give it more exposure to the business, which it described as its most successful investment outside of its domestic operations.
In a statement, the South African incumbent pointed to Tanzania’s 57% mobile penetration rate as another reason for the move, saying it was a high-growth market. Vodacom Tanzania, the leading operator in the country, has more than 10 million mobile subscribers and grew its service revenue by 19.1% in the six months leading up to September, according to Vodacom.
The operator expects the transaction to close before the end of February when the South African financial year finishes. It will need approval from the South African Reserve Bank and be satisfied with Calvary’s books before that point.
UBS has already given a fairness opinion to Vodacom shareholders.
Separately, Vodacom – which is 65%-owned by British telco Vodafone Group – has been in talks with India’s Tata Communications for Neotel. A takeover of South Africa’s number two fixed-line network operator could cost Vodacom a reported US$502m.
Meanwhile the South African giant shrugged off suggestions that it was set to acquire a stake in Botswana’s Bemobile. A report at the end of October had linked Vodacom to the privatisation of the state-owned operator, but a spokesperson said they were not aware of any interaction with the company.
