Vodacom to acquire majority stake in Vodafone Egypt
Vodafone Group (Vodafone) has agreed to transfer its 55% shareholding in Vodafone Egypt to Vodacom Group (Vodacom), its sub-Saharan African subsidiary.
Through this transfer of ownership, the company aims to simplify the management of Vodafone’s African operations and will strengthen the delivery of connectivity and financial services in Africa.
Other benefits of this change in ownership include giving Vodacom added exposure to another leading business in an attractive market, diversifying its portfolio and accelerating its growth profile.
As for Vodafone Egypt, the company will benefit from closer co-operation with Vodacom, enabling it to accelerate growth in financial services and IoT.
Under the terms of the transaction, Vodafone’s 55% shareholding in Vodafone Egypt is valued at €2,722 million ($3,145 million), on a debt free, cash free basis. The net debt valuation of Vodafone’s 55% share of Vodafone Egypt is €2,365 million ($2,732 million).
Approximately 80% of the Purchase Consideration (€1,892 million) will be settled by the issue of 242 million new ordinary Vodacom shares to Vodafone at an issue price of ZAR 135.75 per share. As a result, Vodafone’s ownership in Vodacom will increase from 60.5% to 65.1%. While the remaining 20% (€473 million), will be paid in cash.
The deal has been unanimously approved by a committee of Vodacom’s independent non-executive directors, while Vodafone will not vote on the deal and the transaction will require approval by the minority shareholders representing 39.5% of the Vodacom shares.
The transaction is subject to closing conditions, including approval from the Financial Surveillance Department of the South African Reserve Bank and approval from the National Telecom Regulatory Authority of Egypt.
The transaction is expected to close by 31 March 2022.