Pan-African telecoms group Liquid Telecom has entered into an agreement to acquire South African communications network operator Neotel.
The shareholders of Neotel – Tata Communications of India and minority shareholders led by Nexus Connexion – have agreed for Liquid Telecom (majority owned by Econet Wireless Global) to acquire Neotel for ZAR6.55 billion. Liquid Telecom is partnering with Royal Bafokeng Holdings (RBH), a South African empowerment investment group, which has committed to take a 30% equity stake in Neotel.
The transaction is transformative and will create the largest pan-African broadband network and B2B telecoms provider. The deal is subject to obtaining all affirmative approvals and other corporate approvals that may be required by the shareholders of Neotel and other regulatory approvals.
Through a single access point, businesses across Africa will be able to access Liquid Africa’s 24,000km of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned.
Commenting on the transaction, Nic Rudnick, Liquid Telecom CEO, said, “Leveraging the strengths of RBH, Neotel and Liquid Telecom will offer an unprecedented fibre network with a unique set of services and international connectivity for telecom operators and enterprises across sub-Saharan Africa. For the first time, African companies will be able to connect with each other in a cost effective and reliable way, all on a single fibre network.”
Vinod Kumar, Managing Director and CEO of Neotel’s majority shareholder Tata Communications, said: “Convergence of technologies and services will be the key driver of growth across the globe and this transaction will encourage inclusion and support the growth aspirations of the African continent.”
The transaction is subject to approval by South African regulatory authorities and is expected to be completed later this financial year.