Vodacom, Neotel confirm talks
Vodacom and the shareholders of Neotel on Monday (30 September) announced that they have entered into exclusive discussions regarding a potential acquisition of 100% of the shares of Neotel by Vodacom SA.
This ends months of speculation after SA news site, MyBroadband first reported in May that Neotel was in the acquisition cross-hairs of mobile operators, Vodacom and MTN, citing industry sources close to the matter.
It was reported soon after that MTN had dropped out of the potential negotiations, leaving only Vodacom in the running.
Vodacom has been in advanced discussions to seal the deal since August, sources have said.
“The finalisation of the transaction is subject to the successful conclusion of commercial negotiations and receiving the requisite regulatory and corporate approvals,” the companies said in a joint statement.
This transaction, if concluded, would stimulate greater competition in the South African fixed telecommunications sector and will accelerate the provision of high speed data links, both parties said.
It would also result in the combined entity being able to offer an expanded product range and, as a consequence, enhanced customer choice, they said.
Bloomberg estimates Neotel’s worth to be R5.9 billion (US$596 million).
Speaking about the transaction, Vodacom Group CEO Shameel Joosub said “There are a number of important steps that we still need to complete in order to conclude the transaction. ”
“If the deal is implemented, Vodacom intends to put significant investment into the combined entity to provide high-speed fixed connectivity to many more businesses and consumers.”
“By further building on the capabilities within Neotel, we would also aim to develop entirely new services such as fibre to the home and business. Neotel has access to over 15,000km of fibre-optic cable, including 8,000km of metro fibre in Johannesburg, Cape Town and Durban,” Joosub said.
“Spectrum is also an important consideration as the combined entity could use this resource more efficiently, and in doing this we can keep pace with South Africa’s rapidly growing demand for mobile data. This transaction is all about providing greater choice and better infrastructure for South Africa’s businesses and consumers,” he said.
Sunil Joshi, Neotel CEO, said: “We believe this presents an exciting and attractive opportunity for all parties, especially our customers to whom we will be able to offer more meaningful and innovative products and services.
“This transaction, if concluded, would further enable Neotel to extend its footprint in South Africa and add the mobile capability that our customers require for their business’ growth in a new world of converged communications.
More news on Neotel and Vodacom
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