Cape Town - Vodacom Group [JSE:VOD] advised shareholders on Monday that it has entered into an agreement with the shareholders of Neotel to acquire 100% of the company for R7bn.
This follows the announcement late last year that the parties were entering into exclusive talks for a due diligence.
Vodacom said it will fund the acquisition through available cash resources and existing credit facilities. The deal remains subject to the fulfilment of a number of conditions, in particular regulatory approvals.
Neotel is South Africa's second-largest fixed telecommunications operator. It provides a range of value-added voice, internet and data services for businesses and retail customers.
Neotel MD and CEO Sunil Joshi said: “We are encouraged at the progress made to date and will focus now on ensuring compliance with the regulatory approvals processes and the engagement with the competition authorities.
"Neotel continues to grow in the South African market and this, when approved, will enable a greater choice of product and services for our customers and increased competition, while Neotel continues to deliver improved services and grows its customer base.“
Vodacom's customer base will benefit from Neotel's extensive fibre assets and enterprise capabilities, which will allow Vodacom to accelerate its fixed enterprise strategy and stimulate greater competition in South Africa's fixed telecommunications sector.
The combined entity will be able to offer an expanded product range and, as a consequence, enhanced customer choice. The transaction is expected to close before the end of the current financial year, although the requisite regulatory approvals will play a role in this.
This follows the announcement late last year that the parties were entering into exclusive talks for a due diligence.
Vodacom said it will fund the acquisition through available cash resources and existing credit facilities. The deal remains subject to the fulfilment of a number of conditions, in particular regulatory approvals.
Neotel is South Africa's second-largest fixed telecommunications operator. It provides a range of value-added voice, internet and data services for businesses and retail customers.
Neotel MD and CEO Sunil Joshi said: “We are encouraged at the progress made to date and will focus now on ensuring compliance with the regulatory approvals processes and the engagement with the competition authorities.
"Neotel continues to grow in the South African market and this, when approved, will enable a greater choice of product and services for our customers and increased competition, while Neotel continues to deliver improved services and grows its customer base.“
Vodacom's customer base will benefit from Neotel's extensive fibre assets and enterprise capabilities, which will allow Vodacom to accelerate its fixed enterprise strategy and stimulate greater competition in South Africa's fixed telecommunications sector.
The combined entity will be able to offer an expanded product range and, as a consequence, enhanced customer choice. The transaction is expected to close before the end of the current financial year, although the requisite regulatory approvals will play a role in this.