October 13, 2016
Vodafone plans to expand its operations in emerging markets by increasing its stake in South African network Vodacom to 65%.
A ‘non-binding proposal’ of US$2.3 billion to acquire an extra 15% stake in Vodacom has been submitted by Vodafone.
Vodafone already owns 50% of Vodacom, with the other 50% owned by South Africa fixed line provider Telkom.
Disputes between the two companies have frustrated the Vodacom board, who have complained that it is difficult to keep two equally influential shareholders happy.
As such, the proposed deal is subject to Telkom distributing its remaining 35% of shares among its shareholders.
Vodafone believes Vodacom is an ‘attractive asset’ because of strong market positions in South Africa, Lesotho, the Democratic Republic of Congo, Lesotho, Mozambique and Tanzania.
Vodacom is the biggest mobile operator in South Africa with 24.8 million customers. It is has 9.2 million customers in its other markets.
Earlier this year Vodafone shook up executive roles, dividing the emerging markets position into two.
Morton Lundal was appointed as CEO of the newly created Central Europe and Africa Region.
In August Vodafone acquired a 70% stake in Ghana Telecom.