Vodacom Group this week announced that it has agreed terms with Vodafone to acquire its controlling stake in Vodafone Egypt, one of Africa’s premier telecom operators.
Subject to regulatory and shareholder approvals, Vodacom Group will fund the acquisition of a 55% stake in Vodafone Egypt by issuing 242 million new ordinary shares at R135.75 per share and R8.2 billion (US$548 million) in cash. This values the proposed transaction at circa R41 billion or US$2.738 billion.
An established brand, 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. Egypt’s appeal as an investment destination is supported by its economic growth outlook, large, young and growing population and structural reform agenda.
Vodafone Egypt holds a strong network leadership position and is the country’s largest mobile wallet provider through Vodafone Cash. According to the national telecom regulatory authority, Vodafone Cash had almost 90% of mobile wallet transactions as at August 2021.
Vodacom Group shareholders are expected to gain significant value by scaling its multi-product strategy or “System of Advantage” into Egypt. With more than 80% of Egypt’s 100 million population unbanked, there is a significant opportunity to leverage its financial services platforms, global partnerships and best practices into this largely untapped market. In addition to financial services, Vodacom Group sees attractive synergy potential from combining Vodafone Egypt’s software factory with Vodacom Group’s existing big data capabilities, closer cooperation in scaling pan-African enterprise and IoT solutions, enabling the proliferation of digital services through a platform approach, and also talent sharing.
Shameel Joosub, Chief Executive Officer of Vodacom Group
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 GDP.
