South African wireless phone operator Vodacom Group, an arm of Vodafone, has reached a deal to buy Tata Communications-controlled Neotel for $676 million.
“The shareholders of Neotel and Vodacom SA announced that they have favourably concluded an agreement on the commercial structure and terms to proceed for Vodacom to acquire 100% of the shares of Neotel, valued at an enterprise value of ZAR 7.0 billion (Rs 3,950 crore),” Tata Comm said in a statement.
Neotel, South Africa’s second-biggest fixed-line operator, is 68.5% owned by Tata Comm. It competes with former state-owned service provider Telkom.
The deal would give Vodacom a large fibre optic network for high-speed Internet and create a telecom company with annual revenue of more than 5 billion rand.
“Tata Communications is pleased with the outcome of this deal. It is in line with our financial objectives while paving the way for Neotel to improve its value proposition in the South African market,” said Vinod Kumar, CEO.
Vodacom operates in Tanzania, Democratic Republic of Congo, Lesotho and Mozambique.