Vodacom shareholders approve Vodafone Egypt acquisition

After receiving shareholder backing, Vodafone got closer to abandoning its majority stake in Vodafone Egypt and giving it to its South African subsidiary yesterday.   

As such, most shareholders in Vodacom approved the acquisition of the 55 percent stake in Vodafone Egypt during a general meeting, the Johannesburg-listed company announced.  

Vodafone, which holds a 60.5 percent stake in Vodacom Group, was excluded from the process of voting on the approval of the transaction at the general meeting. This was done to adapt to appropriate governance controls.  

In addition, Vodafone Egypt holds a 43 percent revenue market share and has 43 million consumer and enterprise customers.  

Vodacom says it will fund the acquisition of Vodafone Group’s 55 percent stake in Vodafone Egypt, which is subject to the final outstanding regulatory approvals, which will happen by issuing 242 million new ordinary shares at $8.76 per share, as well as around $548 million in cash.  

Vodacom Group CEO Shameel Joosub described the approval as “an exciting and important milestone for Vodacom,” citing diversification and growth opportunities that include the enormous potential to leverage the company’s financial services platforms; over 80 percent of Egypt’s 100 million population is unbanked.  

On another note, the mobile operator said, “it will work towards closing the transaction before the end of its financial year in March 2022.” BJoosub added: “This is a transaction that presents significant diversification and growth opportunities for our shareholders. With over 80 percent of Egypt’s 100 million population unbanked, Vodacom sees enormous potential to leverage our financial services platforms, global partnerships, and best practices in a significant market.”  

However, the deal will stay conditional regarding the receival of specific approvals from the Johannesburg Stock Exchange, National Telecom Regulatory Authority of Egypt and Egypt’s Financial Regulatory Authority.   

It is worth mentioning that the mobile operator says it will strive to complete the transaction before its fiscal year-end in March 2022.