Liquid Telecom, a pan-African telecoms group, majority owned by Econet Wireless Global on has entered into an agreement to acquire Tata Communications-owned Neotel, a South African communications network operator, for ZAR6.55 billion. Liquid Telecom said that it is partnering with Royal Bafokeng Holdings (RBH), a South African empowerment investment group, which has committed to take a 30% equity stake in Neotel.
The transaction is subject to approval by South African regulatory authorities and is expected to be completed later this financial year.
“Liquid Telecom is the right partner for the next phase of Neotel’s evolution. 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,” Vinod Kumar, Managing Director and CEO, said in a joint statement.
Through a single access point, businesses across Africa will be able to access Liquid Africa’s 24,000km of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion 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,” Nic Rudnick, Liquid Telecom CEO, said in a joint statement.
Rudnick said that Liquid will also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic, which will enable the company to launch exciting new products and services. Nexus Connection, Neotel’s minority shareholder, also welcomed the transaction.
“We welcome this transaction with Liquid Telecom. It will see the sale of Neotel to new shareholders who have the vision, expertise and funding to continue to grow the company and to allow it to reach its full potential in South Africa and across the African Continent,” Kennedy Memani said.