Wall Street Journal puts the deal between Vodacom and Neotel at close on R5 billion ($460 million), reporting that a commercial announcement is anticipated in the next two months.
Mobile operator, Vodacom and fixed-line business, Neotel entered into exclusive discussions regarding a potential acquisition of 100% of the shares of Neotel by Vodacom, in September last year. In October, Bloomberg reported that Vodacom’s proposed takeover of Tata Communications’ South Africa unit would include up to $500 million (R5.3 billion) of debt, citing two people familiar with the negotiations. “The deal could be valued as high as 10 billion rand ($994 million),” Bloomberg said, citing a source.
Neotel’s parent company, Tata Communication acquired a 2.5% stake in the operator last year, valued at R149 million, thus taking its total share in Neotel to 68.5%, and valuing the company at R5.9 billion. According to WSJ, Neotel boasts 152,000 customers and 1,000 employees and contributes about 11% of Tata’s revenues. “The deal will be valued at about 28 billion rupees ($460 million) with Vodacom taking over Neotel’s debt,” it reported. “We expect to make a commercial announcement in the next two months,” a Tata executive, who declined to be named, told The Wall Street Journal.
According to WSJ, the two telco firms will initially sign a share purchase agreement and then seek approval from South Africa’s telecommunications and antitrust regulators.
This article was originally published on Business Tech: http://businesstech.co.za/news/telecommunications/54929/vodacom-neotel-deal-valued-at-460-million/