In a joint announcement today, Nedcor and Reunert, revealed their intention to merge their cellular operations, which will see two independent and dual-service cellular providers join forces in their continued pursuit of the high value, corporate and business cellular contract market.
Nashua Cellular Communications is wholly owned by Reunert. Nedcor owns 88,8 percent of NedTel Cellular, with the other 11,2 percent held by Metropolitan Life Limited.
Details of the merger have yet to be finalised and are subject to approvals from the Nedcor and Reunert Boards, as well as any relevant regulatory authorities. The parties have agreed on the major principles surrounding the merger.
Says Richard Laubscher, chief executive of Nedcor and Gerrit Pretorius, chief executive of Reunert: "Together, Nashua Cellular and NedTel Cellular`s contract subscribers will amount to 200 000 and the cellular merger is expected to create the largest independent, dual-service provider targeting the high value, business and corporate market in South Africa.
"Nashua Cellular and NedTel Cellular each have their own unique and strong market presence, and an estimated combined 16 percent share of the corporate cellular market.
"Anticipated synergies for both parties are considerable and we believe that tremendous opportunities will be created by putting these two businesses together.
"We are very pleased and excited by this deal and our intention is to list the merged cellular entity when the time is right. Looking at the prices achieved in recent cellular deals and considering the high quality of the combined subscriber base, we believe that the business has an appealing future value uplift."
Says Laubscher: "As technology, media and telecommunications converge with financial services, Nedcor is positioning itself to utilise cellular telephony as an integral part of its delivery strategy in fulfilling true anywhere, anytime banking."
"Nedbank Electronic Banking, in collaboration with NedTel Cellular was among the first three banks world wide to introduce transactional Internet banking via a cellular phone using WAP technology.
"More and more deals are being concluded internationally that prove this convergence is a reality and it is satisfying to know that Nedcor has been the only South African bank to introduce this capability."
The proposed merger will allow Nedcor further opportunity to market mobile banking services to an extended customer base.
Benefits are expected from combining back office infrastructure and systems, with lower unit costs resulting from combining and improving processes. It is not expected that the merger will lead to job losses but rather the merged entity will be strengthened through the combining of the respective skills bases.
Says Pretorius: "Nashua, locally and through its international associates, has been at the forefront of converging electronic office automation. Nashua`s strong brand image and exceptional market expertise, coupled with an already wide distribution network, provides the opportunity to introduce the wide range of Nashua office automation products to NedTel Cellular`s large corporate client base, while at the same time providing an opportunity for Nashua to enhance the service offering to its own clients."
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