India’s Tata Communications, which owns a controlling stake in Neotel, announced on Tuesday that it’s selling the South African telecoms company to Liquid Telecom for R6,55 billion.
Liquid Telecom is a data, voice and IP provider. Local empowerment investment group Royal Bafokeng Holdings has also committed to taking a 30% stake in Neotel, said Tata Communications.
The deal comes after Vodacom launched a bid in May 2014 to buy Neotel for R7 billion.
But in March 2015, Vodafone CEO Vittorio Colao and Vodacom CEO Shameel Joosub expressed their frustration at regulators’ slow approval of the deal.
Amid MTN and Cell C also opposing the transaction, Vodacom abandoned the deal in March this year citing “regulatory complexities and certain conditions not being fulfilled”.
However, Neotel expects regulators to move faster on Liquid Telecom’s bid for the company.
“Next steps will be to submit this transaction to Icasa (Independent Communications Authority of South Africa), the Competition Commission, then the Competition Tribunal for approval,” said Kennedy Memani, a non-executive director at Neotel, in an emailed statement.
“We expect this process to be concluded by the end of the current financial year,” said Memani.
Neotel’s current financial year ends in March 2017, the company told Fin24.
Meanwhile, Liquid Telecom’s bid to buy Neotel is expected to create the largest pan-African broadband network and business-to-business telecoms provider, according to the companies.
Liquid’s acquisition of Neotel would mean its connectivity business would span 12 countries from South Africa to Kenya.
“I believe Liquid Telecom is the right partner for Neotel,” said Memani in the statement.
“Our respective customers and networks complement each other well, the transaction structure is in line with our country’s critical BEE agenda and I am confident that our customers and our employees will benefit from the transaction and from the resulting stability and business expansion,” said Memani.
Liquid Telecom is majority owned by Econet Wireless, a company founded and run by Zimbabwean businessman Strive Masiyiwa.
Source: News24 Wire