Abu Dhabi group may buy 60% stake in Vodacom, insiders say

The Abu Dhabi airline is studying the possibility of Britain’s Vodafone Group buying some or all of JSE-listed Vodacom’s stake, people familiar with the matter said.

Vodafone owns about 60% of the company. Shares in Vodacom rose more than 7% earlier on Wednesday, their biggest one-day gain since March 2020, with a market capitalization of around R243 billion. It was up about 5% at the close. Vodafone shares pared earlier losses to trade 0.1% lower in London.

Etisalat is also weighing the possibility of merging some of its African operations with Vodacom or buying Vodacom’s assets in specific countries, the people said. It is in the early stages of weighing which path to take and could consider other forms of collaboration, the people said.

Any merger would see the Middle East’s largest telecom operator merge with the second-largest African operator by market value.Under Vodacom, Vodafone has been steadily consolidating its interests on the African continent, which supply Telecommunications services in countries such as South Africa, Tanzania, and the Democratic Republic of the Congo.

Etisalat becomes Vodafone’s biggest The company became a shareholder earlier this year and hopes to leverage that position as it plans to expand its operations in Africa, according to people familiar with the matter.

Deliberations are ongoing and it is not certain they will lead to any deal. A spokesman for Etisalat said the group was looking for opportunities in the market in line with its strategy of growing partly through acquisitions, although “no such projects are currently underway”.

Representatives for Vodafone and Vodacom declined to comment.

Etisalat disclosure In May, it paid $4.4 billion for a 9.8% stake in Vodafone. It announced on Wednesday that it was increasing its stake to 11%. The Middle Eastern company is the controlling shareholder of North African operator Maroc Telecom, which has a market capitalization of about $9.5 billion in Casablanca.

Telcos in the Middle East have been ramping up deals this year. Etisalat has been committed to Promote Its stake in Saudi Arabia’s Mobily, while Qatar’s Ooredoo QPSC is Serving Selling its network towers, too consider Open up its data center division.

“Etisalat’s possible acquisition of Vodafone’s 60% stake in African operator Vodacom could face a number of hurdles, as agreements would need to be signed by the governments of Morocco, South Africa and Kenya, as well as regulatory and competition authorities. An agreement could bring considerable synergies to Etisalat effect, adding value to its business outside the UAE with emerging market telecom and mobile money expertise,” said Bloomberg Intelligence telecom analyst John Davies.