Vodafone Group plc wants to increase its bet on Africa.
The U.K.-based wireless giant made a nonbinding
proposal to acquire an additional 15% stake in Vodacom Group Ltd. for 22.5 billion South African rand, or $2.46 billion, in cash.
This would bring Vodafone's stake in its JV with Telkom SA to 65%, adding to its position in a booming emerging market. It increases by almost one-third the rate at which several of the world's fastest-growing mobile markets add to Vodafone's subscriber base and revenues, ComputingSA.com reports, and it
enables Vodafone to keep pace with its rival, Orange/France Telecom, in the expansion of interests in the mobile markets of Africa, where Orange/FT's emerging markets play is concentrated.
FT.com says Vodafone is expected to fund the transaction from its existing debt facilities and cash, an important consideration given the turmoil in global credit markets.
An analyst said the question for Vodafone going forward is
how to manage all these separate African assets. The assets include positions in South Africa, Democratic Republic of Congo, Lesotho, Mozambique and Tanzania.
The deal is also contingent upon Telkom divesting its remaining stake of 35% in Vodacom to Telkom shareholders. Telkom said it was supportive of the deal, but warned shareholders to
exercise caution. -
Baz Hiralal
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