Pan-African telecommunications group Liquid Telecom and South African empowerment investment group Royal Bafokeng Holdings (RBH) will acquire South African communications network operator Neotel for R6.55-billion.
Liquid Telecom has entered into an agreement with Neotel’s parent company Tata Communications and other minority shareholders to buy Neotel and has partnered with RBH, which has committed to taking a 30% equity stake in Neotel.
South African telecommunications group Vodacom in March abandoned its R7-billion bid for Neotel owing to regulatory complexities and the failure to meet certain conditions.
Liquid Telecoms, RBH and Tata Communications noted in a joint statement on Tuesday that the deal, which remained subject to regulatory approvals, was “transformative and will create the largest Pan-African broadband network and business-to-business telecoms provider”.
Through a single access point, businesses across Africa will be able to access Liquid Africa’s 24 000 km of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansions planned.
“We are excited about this transaction. Leveraging the strengths of RBH, Neotel and Liquid Telecom 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,” commented Liquid Telecom CEO Nic Rudnick.
RBH CEO Albertinah Kekana added that the transaction was in line with the group’s objective to invest in high-growth infrastructure sectors.
“As a long-term investor, we are pleased to be partnering with Liquid Telecom who has a very credible 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,” she noted.