Vodacom Group to acquire control of Vodafone Egypt for R41 billion

Vodacom Group to acquire control of Vodafone Egypt for R41 billion

Vodacom Group announced today 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.

Commenting on the proposed transaction, Shameel Joosub, Chief Executive Officer of Vodacom Group, said: “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. Vodafone Egypt is ideally positioned to capture growth in a burgeoning ICT market, which means the proposed acquisition provides our shareholders with an exciting revenue and profitability diversification opportunity and the potential to accelerate the Group’s medium-term operating profit growth potential into double digits. We intend to provide an update on our medium-term targets at our full year results, which will be reported in May 2022.”

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.

Vodafone Egypt has a proven track record of consistently delivering strong revenue growth, evidenced by a 14% FY17-21 revenue CAGR, while its future growth potential is underpinned by a broad range of fundamental sector and company specific drivers. In addition to a track record of revenue growth, Vodafone Egypt generates attractive margins and strong free cash flow.

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 […]

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