Tata Communications-owned Neotel is South Africa’s second largest fixed telecommunications operator, providing a range of value-added voice, internet and data services for businesses and retail customers.
The transaction is expected to close before the end of the current financial year.
(READ MORE: Vodacom and Neotel in exclusive negotiations)
Vodacom said that it will fund the acquisition through available cash resources and existing credit facilities.
“Vodacom has entered into an agreement with the shareholders of Neotel Proprietary Limited under the terms of which Vodacom will acquire 100 per cent of the issued share capital in and shareholder loan claims against Neotel for a cash consideration equivalent to an enterprise value of 7 billion rand,” said Vodacom.
(READ MORE: Vodacom's potential acquisition a potential telecoms game change)
However, the transaction remains subject to applicable regulatory approvals.
[DATA VOD:Vodacom Group Limited] added that its customer base will benefit from Neotel’s extensive fibre assets and enterprise capabilities which allows Vodacom to accelerate its fixed enterprise strategy.
The deal also allows Vodacom to stimulate greater competition in the South African fixed telecommunications sector.
BY TRUST MATSILELE