Blue Label to acquire 45% of Cell C for ZAR5.5bn

5 Oct 2016

Johannesburg-based pre-paid airtime distributor Blue Label Telecoms has announced that it has agreed to acquire 45% of South African wireless operator Cell C for ZAR5.5 billion (USD399 million) via its subsidiary The Prepaid Company (TPC), effective 18 November. The two sides have been in discussions since December 2015, though under a previously announced deal Blue Label was to acquire 35% of Cell C, as part of a major restructuring process. Blue Label, which has acted as a distribution partner for Cell C for a number of years, said: ‘The proposed transaction provides a compelling value proposition to Blue Label, as well as to Cell C and its customers, affording both companies the opportunity to realise synergies in product distribution, and positioning Blue Label to benefit from the improved operational and financial performance that the combined platform will create.’ Blue Label, through TPC, will settle the ZAR5.5 billion acquisition price with ZAR2.0 billion via a vendor consideration placement with Net1 UEPS Technologies at a price of ZAR16.96 per share, while the remaining ZAR3.5 billion will be settled using available cash and funding facilities.

TeleGeography notes that Cell C is wholly owned by holding company 3C Telecommunications, which is itself owned by Oger Telecom South Africa (60%), Black Economic Empowerment [BEE] entity CellSAf consortium (25%), and Lanun Securities (15%). Following the conclusion of the amended deal, 3C Telecommunications (CellSAf and Oger Telecom) will hold 30% of the cellco’s equity, Blue Label will own 45%, while Cell C’s staff and management will be in charge of the remaining 25%.

South Africa, Cell C, Oger Telecom