Vodacom shareholders vote in favour Vodafone Egypt bid
Vodacom Group’s bid for a controlling stake in Vodafone Egypt is set to proceed after the operator received shareholder backing today.
Vodacom Group says the proposed acquisition of a 55% stake in Vodafone Egypt cleared a crucial hurdle today, when minority shareholders overwhelmingly voted in favour of the transaction.
Given the related-party nature of the transaction, the mobile operator has ensured appropriate governance controls were put in place so the deal is executed and concluded on an arm’s length basis, says Vodacom.
As a result, Vodafone, which currently holds a 60.5% stake in Vodacom Group, was precluded from voting on the approval of the transaction at the general meeting.
The Midrand-headquartered telco first announced in November its intention to acquire a majority shareholding in Egypt’s largest mobile network operator.
Vodafone Egypt holds a 43% revenue market share, and has 43 million consumer and enterprise customers.
Today, the telco revealed shareholders approved the proposed transaction at the general meeting, paving the way for Vodacom to fund the circa R41 billion ($2.738 billion) transaction.
Subject to the final outstanding regulatory approvals, Vodacom says it will fund the acquisition of Vodafone Group’s 55% stake in Vodafone Egypt by issuing 242 million new ordinary shares at R135.75 per share, in addition to around R8.2 billion ($548 million) in cash.
Commenting after the shareholders’ vote, Vodacom Group CEO Shameel Joosub says: “This is an exciting and important milestone for Vodacom, as the acquisition of Vodafone Egypt will be transformational in our evolution from a telco to a techco.
“This is a transaction that presents significant diversification and growth opportunities for our shareholders. With over 80% of Egypt’s 100 million population unbanked, Vodacom sees enormous potential to leverage our financial services platforms, global partnerships and best practices in a significant market.”
The mobile operator says it will work towards closing the transaction before the end of its financial year in March 2022.
However, the deal remains conditional upon receipt of certain approvals from the Johannesburg Stock Exchange, National Telecom Regulatory Authority of Egypt and Egypt’s Financial Regulatory Authority.