Vodacom nearing acquisition of Neotel for R7 billion

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Vodacom and Neotel have come to an agreement regarding the former’s acquisition of the latter, a deal that has been in the works since September last year. The biggest change now is the agreement, which carries with it a monetary value for the relatively new telecoms provider.

Vodacom will be picking up Neotel for “…a total cash consideration equivalent to an enterprise value of R7.0bn”, according to Vodacom’s announcement of the deal’s pending finalisation. There are still a few obstacles before Neotel is absorbed by the red company, including regulatory approval, though Vodacom believes that the acquisition will be complete before the end of the current financial year.

The deal will give Vodacom access to fixed infrastructure as well as more spectrum, which is currently sitting in Neotel’s hands and which will be used to speed up Vodacom’s LTE ambitions. Neotel’s staff will, it seems, be staying on with no layoffs indicated for the company.

Vodacom CEO Shameel Joosub said in a statement “Through the combination of these two businesses, the provision of a wider range of business services and much needed consumer services like fibre-to-the-business and fibre-to-the-home becomes a concrete reality – it will be good for the consumer, good for business and good for the country. And for our investors, the transaction fits perfectly within the priorities of Vodacom’s growth strategy focused on continuing our investment in data and our Enterprise business.”

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