Vodacom SA buys majority stake in Vodafone Egypt

South Africa’s Vodacom Group has agreed to buy a 55% controlling stake in Vodafone Egypt for $2.73 billion as part of the telco’s pan-African expansion bid. The shares are currently held by United Kingdom’s (UK) Vodafone Group Plc.

This comes barely six months after Vodacom, through the Global Partnership for Ethiopia, a consortium led by Kenya’s Safaricom, acquired a licence to start operations in the horn of Africa next year.

Vodacom Group will fund its acquisition in Vodafone Egypt by issuing 242 million new ordinary shares priced at $8.88 per share and $548 million in cash. This values the proposed transaction at about $2.73 billion.

“Acquiring a majority stake in Vodafone Egypt would cement Vodacom Group’s position as Africa’s leading techco by advancing our strategic connectivity and financial services ambitions while increasing our total population coverage on the continent to over half a billion people and more than 40% of Africa’s gross domestic Product (GDP),” Vodacom’s Chief Executive Shameel Joosub said in a statement.

Vodacom, which also acquired 35% stake in Kenya’s Safaricom from Vodafone Group in 2017, currently has operations in South Africa, Tanzania, Lesotho, Democratic Republic of Congo and Mozambique.

UK’s Vodafone Group Plc owns 60.5% shareholding in Vodacom as at March 2021.

“Vodafone Egypt is ideally positioned to capture growth in a burgeoning ICT market, which means the proposed acquisition provides our shareholders with exciting revenue and profitability diversification opportunity and the potential to accelerate the group’s medium-term operating profit growth potential into double digits,” said Joosub.

Vodafone Egypt is the largest mobile network operator in Egypt with 43% revenue market share, offering a range of integrated telecommunications services including voice, data and mobile money services to 43 million consumer and enterprise customers.