South African giant Vodacom Group’s bid for a controlling stake in Vodafone Egypt is set to proceed after the operator received shareholder backing.
The proposed acquisition of a 55 percent stake in Vodafone Egypt cleared a crucial hurdle when minority shareholders overwhelmingly voted in favour of the transaction.
Vodafone, which currently holds a 60.5 percent stake in Vodacom Group, was precluded from voting on the approval of the transaction at the general meeting. This, it seems, was in order to conform to appropriate governance controls.
We reported in November last year Vodafone Group’s announcement that it was transferring its 55 percent majority holding in Vodafone Egypt to its sub-Saharan Africa-focused unit Vodacom Group.
Vodafone Egypt holds a 43 percent revenue market share and has 43 million consumer and enterprise customers.
Subject to the final outstanding regulatory approvals, Vodacom says it will fund the acquisition of Vodafone Group’s 55 percent stake in Vodafone Egypt by issuing 242 million new ordinary shares at R135.75 (about $8.76) per share, in addition to around R8.2 billion ($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 enormous potential to leverage the company's financial services platforms; over 80 percent of Egypt’s 100 million population is unbanked.
The mobile operator says it will work towards closing the transaction before the end of its financial year in March 2022. However, the deal remains conditional upon the receipt of certain South African and Egyptian regulatory approvals.