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Vodacom has entered into an agreement with Cavalry Holdings and its shareholders to acquire an additional indirect 17,2% interest in Vodacom Tanzania, through the subscription for new shares in Cavalry.
The consideration payable for the subscription of new shares in Cavalry is R2,46-billion, payable in cash at completion.

The move will Cavalry’s existing shareholders’ interest in Cavalry from 100% to 51% and result in Vodacom increasing its total economic interest in Vodacom Tanzania from 65% to 82,2%.

Cavalry’s existing shareholders will retain an indirect 17.8% interest in Vodacom Tanzania.

The transaction is expected to close before the end of the financial year, subject to the fulfilment of a number of conditions precedent.

Cavalry is a private investment holding company and an indirect shareholder of Vodacom Tanzania through its interest in Vodacom Tanzania’s existing strategic partner.

The transaction will allow Vodacom to increase its exposure to one of its key investments in sub-Saharan Africa. Vodacom Tanzania has been Vodacom’s most successful investment outside of South Africa to date.

For the six months ended 30 September 2013, service revenue grew 19,1% and the mobile customer base of 10-million represents the largest operation in Vodacom’s international segment.

Tanzania is an attractive telecoms market with mobile penetration only at 57% as at 30 September 2013.