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Vodafone renegotiating deal to buy Tata’s South African telco arm Neotel

23 November, 2015

Vodafone’s African arm Vodacom’s proposed deal to buy South African communication venture Neotel, which is 67.32 per cent held by Tata Communications Ltd, for an enterprise value of ZAR 7 billion (just under $500 million) is being renegotiated, as per a stock market disclosure.

Tata Communications said Neotel’s shareholders are in discussions with Vodacom South Africa regarding a revised transaction structure.

“The outcome of these discussions will impact the extent of the approval being sought from the Competition Tribunal and the scope of the hearing. Accordingly, Neotel and Vodacom South Africa have requested that the hearing be postponed. The details applicable to the postponement are to be determined at a Competition Tribunal hearing in Johannesburg on Monday,” it added.

The structure of the deal, worth $675 million when originally announced, and its commercial terms were subject to regulatory and competition authority approvals.

Apart from Tata Communication, CommuniTel and Nexus Connection are the other shareholders in Neotel, South Africa’s second-biggest fixed-line phone operator.

The companies had entered into exclusive talks for due diligence pertaining to the deal in 2013.

Neotel, which started operations in 2007, is the second-largest provider of fixed telecommunications services for both businesses (commonly referred to as enterprise services) and consumers in South Africa.

It is one of South Africa’s leading converged communications network operators. It provides value-added voice, internet and data services for businesses, wholesale network operators and providers and retail customers using its IP Next Generation Network, powered by Neotel’s fibre optic backbone.

It connects the major centres in South Africa to each other and to the world, directly linking its infrastructure into Tata Communications’ global tier I network.


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Vodafone renegotiating deal to buy Tata’s South African telco arm Neotel

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