Vodacom has\u00a0entered into an agreement with\u00a0Cavalry Holdings to\u00a0acquire an additional indirect 17.2% interest in Vodacom Tanzania, in a deal worth R2.5 billion.<\/p>\n
The deal will see the subscription for new shares in Cavalry, and\u00a0consequently dilute the\u00a0private investment holding company’s\u00a0existing shareholders’ interest in the group from 100% to\u00a051%.<\/p>\n
Vodacom would increase its total\u00a0economic interest in Vodacom Tanzania to 82.2%,\u00a0from 65% before.<\/p>\n
Cavalry’s existing\u00a0shareholders will retain an indirect 17.8% interest in Vodacom Tanzania.<\/p>\n
Vodacom Tanzania is the number one mobile operator in Tanzania that offers voice,\u00a0data and mobile money services with 10.023 million mobile customers as of 30 September\u00a02013.<\/p>\n
By way of rationale for the acquisition,\u00a0Vodacom said it would be able to increase its exposure to one of Vodacom’s key\u00a0investments in sub-Saharan Africa.<\/p>\n
“Vodacom Tanzania has been Vodacom’s most\u00a0successful investment outside of South Africa to date,” it said.<\/p>\n
For the six months ended\u00a0September 2013, service revenue grew 19.1% and the mobile customer base of\u00a010 million represents the largest operation in Vodacom’s international segment.<\/p>\n
“Tanzania is an attractive telecoms market with mobile penetration only at 57% as at
\n30 September 2013. This transaction will increase Vodacom’s effective exposure to this
\nhigh growth market,” the operator said.<\/p>\n
The consideration payable for the subscription of new shares in Cavalry is\u00a0R2.46 billion, payable in cash at completion.<\/p>\n
Vodacom said it will fund the acquisition through available cash resources and existing debt facilities.<\/p>\n
The transaction is expected to close before the end of the financial year, subject to the\u00a0fulfilment of a number of conditions precedent.<\/p>\n
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