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Liquid Telecom buys Neotel for R6,55bn
Liquid Telecom, in partnership with Royal Bafokeng Holdings (RBH), is to acquire Neotel for R6,55-billion.
Liquid Telecom is a privately owned pan-African telecoms group, majority owned by Econet Global. Neotel is currently owned by Tata Communications of India and minority shareholders led by Nexus Connexion.
Liquid Telecom is partnering with South African investment group RBH, which has committed to take a 30% equity stake in Neotel.
The transaction, which is subject to regulatory approvals, will create the largest pan-African broadband network.
Through a single access point, businesses across Africa will be able to access 40 000kms of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned.
Nic Rudnick, CEO of Liquid Telecom, comments: “We are excited about this transaction. Leveraging the strengths of Liquid Telecom, RBH and Neotel, we will offer an unprecedented fibre network with a unique set of services and international connectivity for telecom operators and enterprises across sub-Saharan Africa.
“For the first time, African companies will be able to connect with each other in a cost effective and reliable way, all on a single fibre network. 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.”
Albertinah Kekana, Royal Bafokeng Holdings CEO, adds: “This transaction is part of our diversification strategy and its focus on infrastructure is in line with our objective to invest in high growth sectors. As a long term investor, we are pleased to be partnering with Liquid Telecom who has a very credible track record in rolling out fibre in challenging and diverse markets. This deal represents our long-term investment approach and our commitment to the African growth story.”
Speaking on behalf of Tata Communications, Vinod Kumar, MD and CEO, says: “Liquid Telecom is the right partner for the next phase of Neotel’s evolution. Convergence of technologies and services will be the key driver of growth across the globe and this transaction will encourage inclusion and support the growth aspirations of the African continent.
“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.”
The transaction is subject to approval by South African regulatory authorities and is expected to be completed later this year.