Vodafone increases stake in African group
By Kate Mackenzie in London
Thu Nov 3, 5:10 AM ET
Vodafone, the world's biggest mobile phone network operator, is continuing to ramp up its expansion in emerging countries with plans to spend up to £1.35bn ($2.4bn) increasing its stake in South Africa's Vodacom.
The move would take the UK group's holding in Vodacom to 50 per cent, with South African incumbent fixed line telecoms group Telkom (NYSE:TKG - news) owning the balance.
Telkom has 17m customers, of which 16m are in South Africa, with the remainder in Tanzania, Lesotho, Mozambique and the Democratic Republic of Congo. It offers GSM services in those countries, as well as a 3G service in South Africa.
Vodafone initially invested in Vodacom in 1995 but is now quickly expanding its presence in faster-growing developing countries, as growth slows in its western markets with mobile phone take-up reaching saturation point.
The Vodacom deal comes just a week after Vodafone bought for £820m a 10 per cent stake in Bharti, India's largest mobile phone operator, and indicated it would be interested in increasing the stake.
Vodafone on Thursday said it had struck an agreement with Rembrandt Trust, the biggest shareholder in a holding company, VenFin, whose main asset is a 15 per cent stake in Vodacom. Vodafone plans to then buy out the remaining VenFin shareholders and return to them the company's non-Vodacom assets.
Shares in VenFin soared more than 28 per cent on news of the deal to R46.50 in mid-morning trade. Shares in Vodafone were half a penny higher at 150p.
