It’s official: Vodacom is to buy Neotel for R7-billion.
Shareholders of the two organisations today announced they have favourably concluded an agreement on the commercial structure and terms to proceed for Vodacom to acquire 100% of the shares of Neotel valued at an enterprise value of R 7-billion. This follows the announcement late last year that the parties were entering into exclusive talks for a due diligence.
The structure of the deal and its commercial terms remain subject to regulatory and competition authority approvals and the parties will be immediately commencing the necessary processes in that regard.
Neotel is South Africa’s second largest fixed telecommunications operator. It provides a range of value-added voice, Internet and data services for businesses and retail customers using its Next Generation IP Network.
Sunil Joshi, MD & CEO of Neotel, says: “We are encouraged at the progress made to date and will focus now on ensuring compliance with the regulatory approvals processes and the engagement with the competition authorities.
“Neotel continues to grow in the South African market and with this, when approved, will enable a greater choice of product and services for our customers and increased competition, while Neotel continues to deliver improved services and grows its customer base.”
Vodacom’s customer base will benefit from Neotel’s extensive fibre assets and enterprise capabilities which will allow Vodacom to accelerate its fixed enterprise strategy and stimulate greater competition in the South African fixed telecommunications sector.
The combined entity will be able to offer an expanded product. Neotel also has access to 2 x 12 MHz of 1800 MHz spectrum, 2 x 5 MHz of 800 MHz spectrum and 2 x 28 MHz of 3.5 GHz spectrum.
The transaction is expected to close before the end of the current financial year, although will be dependent of the timing of the requisite regulatory approvals.
