Shareholders in South Africa’s largest mobile operator Vodacom Group have approved on Tuesday a deal to buy a 55 percent stake in the Egyptian unit of parent Vodafone for $2.73 billion in a cash.
At a general meeting this morning, the shareholders also approved resolutions that pave the way to fund the transaction.
The share deal that aims to expand Vodacom’s footprint into Northern Africa for the first time.
“This is an exciting and important milestone for Vodacom as the acquisition of Vodafone Egypt will be transformational in our evolution from a telecommunications company to a technology company,” said Vodacom CEO Shameel Joosub in a statement, following the shareholders’ vote at a general meeting on Tuesday.
Vodacom is working 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 (JSE), Egyptian teleco regulator National Telecom Regulatory Authority (NTRA), and the Egyptian Financial Regulatory Authority (FRA).
Subject to the final outstanding regulatory approvals, Vodacom said it would fund the acquisition of Vodafone Group’s 55 percent 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.
Given the related-party nature of the transaction, Vodacom said it had ensured appropriate governance controls were put in place so that the deal is executed and concluded on an arm’s length basis.
“As a result, Vodafone, which currently holds a 60.5 percent stake in Vodacom Group, was precluded from voting on the approval of the transaction at the general meeting,” Joosub added.
Some 99 percent of shareholders were in favour of ordinary resolution number one: the approval of the transaction. For the purposes of JSE listing requirements, the votes of Vodafone are excluded, the company statement added.
For ordinary resolution number two: approval of the consideration shares, 99.58 percent were in favour, and, for the special resolution of granting authority to issue consideration shares to the sellers, 99.58 percent were in favour.
Vodacom first announced in November, its intention to acquire a majority stake in Vodafone Egypt. Joosub said at the time that the deal would “cement Vodacom Group’s position as Africa’s leading techno 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 percent of Africa’s GDP.”
