Africa’s biggest fixed-line phone firm Telkom said on Thursday its board and the government supported a bid by Britain’s Vodafone to buy Telkom’s stake in Vodacom Group.
Vodafone, which holds 50 percent of Vodacom, South Africa’s biggest mobile phone operator, said it has offered to buy a further 15 percent for 22.5 billion rand.
Telkom and Vodafone have been in talks since June.
”The execution of the proposed transaction remains subject to a number of conditions, including the successful negotiation and agreement of final transaction documents,” Vodafone said in a statement.
”The proposed transaction would result in Vodafone owning 65 percent of an attractive asset with strong market positions in South Africa, Democratic Republic of Congo, Lesotho, Mozambique and Tanzania.”
Vodacom’s growth path has been constrained by a shareholder agreement between Telkom and Vodafone that limited the mobile operator’s expansion in sub-Saharan markets.
Fot Telkom, the disposal of its 50% stake in Vodacom would enable it to re-enter the mobile market.
The South African government owns 38% of Telkom, while state pension administrator Public Investment Corporation holds 15%, and black investment group the Elephant Consortium has 6%. – Reuters