NEW DELHI: Liquid Telecom, a privately owned, pan-African telecoms group, majority owned by Econet Wireless Global on Wednesday said that it has entered into an agreement to acquire South African communications network operator Neotel–owned by India’s Tata Communications and Nexus Connexion–for ZAR6.55 billion.
Liquid Telecom is partnering with Royal Bafokeng Holdings (RBH), a South African empowerment investment group, which has committed to take a 30 percent equity stake in Neotel.
The transaction is subject to approval by South African regulatory authorities and is expected to be completed later this financial year. The deal will create the largest pan-African broadband network and B2B telecoms provider.
In early trade, Tata Communications was trading at Rs. 477, up 6.9 percent, on the BSE.
“Liquid Telecom is the right partner for the next phase of Neotel’s evolution. We believe that Liquid Telecom will deliver on the vision of a well-connected Africa, which will augur well for the South African telecom industry and Neotel’s customers,” Vinod Kumar, Managing Director, and CEO said in a joint statement.
Through a single access point, businesses across Africa will be able to access Liquid Africa’s 24,000km of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned.
“We will also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic, enabling us to launch exciting new products and services,” Rudnick added.
Nexus Connection, Neotel’s minority shareholder, also welcomed the transaction. Speaking on behalf of Nexus, Kennedy Memani, said, “We welcome this transaction with Liquid Telecom. It will see the sale of Neotel to new shareholders who have the vision, expertise and funding to continue to grow the company and to allow it to reach its full potential in South Africa and across the African Continent.”