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Johannesburg/London - 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% of Vodacom, South Africa's biggest mobile phone operator, said it has offered to buy a further 15% for R22.5bn.
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% 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.
For 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 (PIC) holds 15%, and black investment group the Elephant Consortium has 6%.
- Reuters