South Africa’s Vodacom Finalizing Deal To Buy Neotel From Tata

South Africa’s Vodacom Finalizing Deal To Buy Neotel From Tata

From Bloomberg via moneyweb

Vodacom Group Ltd., South Africa’s largest wireless carrier, is negotiating final details for a deal to buy local Web-access provider Neotel Pty Ltd. from Tata Communications Ltd., two people familiar with the matter said.

An agreement has yet to be approved by Neotel’s lenders and board, said one of the people, who asked not to be identified because the talks are private. The companies expect to complete the transaction in the first half pending regulatory approvals, the other person said.

Vodacom, which said in September it had started exclusive talks to buy Neotel, is expanding in data services to offset declining revenue from its domestic voice division. Buying Neotel would help Vodacom add Internet users as it competes against Telkom SA SOC Ltd. and MTN Group Ltd.

The transaction could be worth more than 5 billion rand ($473 million), a person familiar with the discussions said in September. Vodacom would assume about $500 million of debt, people familiar with the talks said in October.

Richard Boorman, a spokesman for Johannesburg-based Vodacom, and Tracy Cohen, Neotel’s chief corporate services officer, declined to comment. Rozzyn Boy, a spokeswoman for India’s Tata Communications in London, said the talks between the companies are continuing, declining to comment further.

Once Vodacom has reached a deal, it will seek approval from South Africa’s communications regulator and competition commission, one of the people said.

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