Vodacom to acquire Neotel in a R7 billion deal
May 19,2014 0 Comments
Mobile operator Vodacom still has its sight on acquiring South Africa’s second fixed line telecom operator Neotel. In an announcement to shareholders the company advised shareholders that it had entered into an agreement with Neotel.
“Shareholders are advised that Vodacom has entered into an agreement with the shareholders of Neotel Proprietary Limited (“Neotel”) under the terms of which Vodacom will acquire 100% of the issued share capital in and shareholder loan claims against Neotel for a cash consideration equivalent to an enterprise value of R7 Billion
“Vodacom will fund the acquisition through available cash resources and existing credit facilities. The Transaction remains subject to the fulfilment of a number of conditions precedent. In particular, the statement says the transaction remains subject to applicable regulatory approvals”. Read the statement.
Neotel is South Africa’s second largest fixed telecommunications operator. It provides a range of value-added voice, internet and data services for businesses and retail customers using its Next Generation IP Network. “Vodacom’s customer base will benefit from Neotel’s extensive fibre assets and enterprise capabilities which will allow Vodacom to accelerate its fixed enterprise strategy and stimulate greater competition in the South African fixed telecommunications sector” Vodacom said.
According to the statement the combined entity will be able to offer an expanded product range and, as a consequence, enhanced customer choice. Neotel also has access to 2 x 12 MHz of 1800 MHz spectrum, 2 x 5 MHz of 800 MHz spectrum and 2 x 28 MHz of 3.5 GHz spectrum. The transaction is expected to close before the end of the current financial year, although will be dependent of the timing of the requisite regulatory approvals.