Vodacom has announced it has agreed terms with Vodafone to acquire a 55% stake in Vodafone Egypt, one of Africa’s premier telecom operators.
Subject to regulatory and shareholder approvals, Vodacom Group will fund the acquisition by issuing 242 million new ordinary shares at R135.75 per share and R8.2 billion (US$548 million) in cash.
This values the proposed transaction at circa R41 billion or US$2.738 billion.
Vodacom CEO Shameel Joosub says acquiring a majority stake in Vodafone Egypt would cement Vodacom Group’s position as Africa’s leading techco.
“By advancing our strategic connectivity and financial services ambitions the acquisition will increase our total population coverage on the continent to over half a billion people and more than 40% of Africa’s GDP.”
Joosub says Vodafone Egypt is ideally positioned to capture growth in a burgeoning ICT market.
“The proposed acquisition provides our shareholders with an exciting revenue and profitability diversification opportunity and the potential to accelerate the Group’s medium-term operating profit growth potential into double digits. We intend to provide an update on our medium-term targets at our full year results, which will be reported in May 2022.”
An established brand, Vodafone Egypt is the largest mobile network operator in Egypt with 43% revenue market share, offering a range of integrated telecommunications services including voice, data and mobile money services to 43 million consumer and enterprise customers.
Egypt’s appeal as an investment destination is supported by its economic growth outlook, large, young and growing population and structural reform agenda.