Etisalat weighs investment in Vodafone’s stake in Vodacom

Etisalat weighs investment in Vodafone’s stake in Vodacom

Emirates Telecommunications Group is discovering a prospective expenditure in Vodafone Plc’s African organization as it seeks to raise its worldwide footprint, folks familiar with the make a difference stated.

The Abu Dhabi carrier is finding out the feasibility of an supply for element or all of Vodafone’s stake in Johannesburg-shown Vodacom Team, the people stated, asking not to be identified mainly because the information is non-public.

Vodafone owns roughly 60% of the firm.

Vodacom shares jumped 7.1% by lunchtime and closed 4.61% higher, at R131.81, on Wednesday.

Etisalat is also weighing the probability of combining some of its own African operations with Vodacom or acquiring Vodacom belongings in precise nations, the people today said. It’s in the early stages of weighing which route to go after, and could also take into consideration other forms of cooperation, according to the people today.

Any tie-up would carry jointly the greatest Middle Japanese telecom operator with the second-largest African carrier by industry value. Vodafone has been steadily consolidating its interests on the continent underneath Vodacom, which provides telecom companies in nations including South Africa, Tanzania and the Democratic Republic of Congo.

Etisalat became Vodafone’s largest shareholder previously this 12 months and is eager to leverage this place as it plots an expansion of its own business in Africa, according to the people.

Deliberations are ongoing and there’s no certainty they’ll guide to any transactions. A spokesperson for Etisalat mentioned the team is scanning the marketplace for prospects in line with its tactic to expand in section by means of acquisitions, although there is “no such project in progress at the second.”

Representatives for Vodafone and Vodacom declined to remark.

Etisalat disclosed in May perhaps that it had spent $4.4 billion for a 9.8% stake in Vodafone. It announced Wednesday it experienced it amplified its keeping to 11%. The Center Eastern business is the managing shareholder of North African provider Maroc Telecom, which has a market benefit of about $9.5 billion in Casablanca.

Telecom firms in the Center East have been stepping up dealmaking this 12 months. Etisalat has been functioning to boost its shareholding in Saudi Arabia’s Mobily, even though Qatar’s Ooredoo QPSC is working on a sale of its network towers and is also considering carving out its data middle unit.

What Bloomberg Intelligence suggests:
Etisalat’s attainable acquisition of Vodafone’s 60% stake in African carrier Vodacom (documented by Bloomberg News) may well face quite a few road blocks as the governments of Morocco, South Africa and Kenya — as nicely as regulatory and level of competition authorities — would require to indicator off. An arrangement could generate appreciable synergies for Etisalat, with emerging-industry telecom and cell-dollars experience introducing price to its functions exterior the UAE.

—John Davies, BI telecoms analyst.

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