Vodacom Group is entering North Africa for the first time, announcing on Wednesday that it will acquire Vodafone Egypt from parent Vodafone Group for R41-billion.
The group will acquire the controlling stake in Vodafone Egypt subject to regulatory and shareholder approvals. It will fund the acquisition of the 55% stake in Vodafone Egypt by issuing 242 million new ordinary shares at R135.75/share and R8.2-billion in cash. The remaining 45% of Vodafone Egypt is held by Telecom Egypt, the fixed-line incumbent.
Shameel Joosub, Vodacom Group CEO, said in a statement that buying a majority stake in Vodafone Egypt will increase Vodacom’s population coverage to more than 500 million people and it will be in countries that make up more than 40% of Africa’s GDP.
He then added: “Vodafone Egypt is ideally positioned to capture growth in a burgeoning ICT market, which means the proposed acquisition provides our shareholders with an exciting revenue and profitability diversification opportunity and the potential to accelerate the group’s medium-term operating profit growth potential into double digits. We intend to provide an update on our medium-term targets at our full-year results, which will be reported in May 2022”.
It has to be noted that Vodafone Egypt is the largest mobile network operator in Egypt with 43% revenue market share, offering a range of integrated telecommunications services including voice, data and mobile money services to 43 million consumer and enterprise customers.