05 October 2022
Vodacom is understood to be finalising its long-awaited Vodafone Egypt acquisition after the operator gained approval from the National Telecommunications Regulatory Authority.
According to Daily News Egypt, the R41bn deal will be concluded before the end of 2022, However, the transfer of the 55% majority stake still requires further approval from the Financial Supervision Department of the Reserve Bank of South Africa.
It is understood that circa 80% of the transaction will be funded through the issue of 242 million new ordinary Vodacom shares to Vodafone at an issue price of R135.75 per share. This will see Vodafone’s ownership in Vodacom increase from 60.5% to 65.1%. The remaining 20% will be settled in cash. Telecom Egypt will retain its 45% stake.
Reporting on the three months to June 30, 2022, Vodafone chief executive Nick Read reaffirmed his confidence that Vodacom could close out its “slightly protracted” takeover of Vodafone Egypt, “in the near term”.
In January this year, Vodacom minority shareholders overwhelmingly approved the deal at a General Meeting, with 99% of votes in favour of the transaction. A total of 43 shareholders were present at the meeting, representing 93% of the issued ordinary shares. At the time, regulatory approval was expected before the end of March 2022.
Vodafone has witnessed repeated turbulence in its attempt to part with its Egyptian entity. Back in December 2020, the operator’s long-running talks with Saudi Telecom were abandoned. Though reasons were not given at the time, it appeared that Saudi Telecom failed to reach an agreement with Vodafone Egypt minority owner Telecom Egypt.
Negotiations were terminated just under a year after Saudi Telecom signed a non-binding memorandum of understanding (MoU) to purchase Vodafone’s 55% share — a deal that would have netted the operator US$2.4bn.