The South African government has approved an offer from Vodafone to buy a 15% stake in Vodacom from incumbent telco Telkom, to give the British group majority control of South Africa’s mobile market leader, reports Business Day. Vodacom is currently 50% owned by Vodafone and 50% by Telkom, but the partnership has not run smoothly, and long running negotiations culminated yesterday with Telkom’s board agreeing to sell a 15% stake to Vodafone for ZAR22.5 billion (USD2.47 billion) including approximately ZAR5 billion in net debt. Telkom will then distribute its remaining 35% to its own shareholders, including the government which holds a 39% stake in the incumbent. Vodacom will then be listed on the Johannesburg Stock Exchange. The deal remains subject to the negotiation of final transaction documents, and shareholder and regulatory approvals. Vodafone did not push to acquire more than 65% of Vodacom, which would have led to it having to relinquish some shares under the state’s black empowerment programme (see below). Vodacom also has mobile operations in the Democratic Republic of Congo, Lesotho, Mozambique and Tanzania.
In related news, Vodacom has announced that it raised ZAR946 million in a share offer exclusively open to the black public, black-controlled groups and the company’s black business partners through YeboYethu, a company set up solely for the purpose of buying and holding shares in the cellco. The YeboYethu offer was almost three times over-subscribed, attracting 102,531 valid applications. 86% of cash received came from individuals and 14% from companies. Vodacom said 49% of valid individual applications were from women.