Vodafone Moves to Control South African Carrier

by Ken Schachter on 06 November 2008, 12:22

Categories: Archives - General news - Media - Communications - Internet - Finance
Topics: vodafone , Verizon , South Africa , Vodacom

 
Vodafone Group plans to pad its 50 percent stake in South Africa wireless provider Vodacom Group by acquiring an additional 15 percent for about $2.1 billion, the company said Thursday.

The deal, which requires the approval of three-quarters of Vodacom shareholders, would extend the reach of London-based Vodafone into Tanzania, Lesotho, and the Democratic Republic of Congo, where it is the No. 1 carrier, and Mozambique, where it is No. 2.

Vodafone, which holds a 45 percent stake in Verizon Wireless, would buy the additional stake from Telkom SA, the Pretoria-based telecommunications carrier. Vodafone would pay $2.2 billion, but it would get the benefit of Vodacom’s $160 million cash position.

The deal also calls for Vodacom to be listed on the Johannesburg Stock Exchange and the distribution of Telkom’s remaining 35 percent stake in Vodacom to its shareholders.

The deal has the support of the South Africa government and the Public Investment Corporation, which own a combined 58 percent of Telkom.

In Thursday afternoon trading, shares of Vodafone fell $1.38, or 7.6 percent, to $16.74 in trading on the New York Stock Exchange.