Liquid Telecom has entered into an agreement to acquire SAfrican operator Neotel for ZAR 6.55 billion which is around $USD 429 million.
Econet will be buying Tata’s 68.5 percent stake in Neotel. Liquid Telecom is partnering with Royal Bafokeng Holdings (RBH), a South African empowerment investment group, which has committed to take a 30 percent equity stake in Neotel.
“Liquid Telecom is partnering with Royal Bafokeng Holdings, a South African investment group, which has committed to take a 30 percent equity stake in Neotel,” the companies said in a statement.
“We will also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic,” said Liquid Telecom Chief Executive Nic Rudnick.
The transaction, expected to be completed later this year, is subject to approval by South African regulators, a number of approvals, including corporate approvals that may be required by the shareholders of Neotel. It will create the largest pan-African broadband network and B2B telecoms provider.
The acquisition would give Econet wireless spectrum and broadband access to South African market. The company, founded and chaired by Strive Masiyiwa, controls Africa-focused Internet provider Liquid Telecom and mobile-phone company Econet Wireless Zimbabwe Ltd.
Through a single access point, businesses across Africa will be able to access Liquid Africa’s 40,000km of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned.
South Africa’s Vodacom in 2014 offered Tata Communications $500 million for Neotel, but dropped the planned deal in March, citing regulatory complexities.
Techunzipped