Cape Town – Vodacom Group [JSE:VOD] has advised shareholders that it has entered into an agreement with the shareholders of Neotel Proprietary Limited (Neotel) to acquire 100% of the company for R7bn.

Vodacom said it will fund the acquisition through available cash resources and existing credit facilities. The deal remains subject to the fulfilment of a number of conditions, in particular regulatory approvals.

Neotel is South Africa’s second-largest fixed telecommunications operator. It provides a range of value-added voice, internet and data services for businesses and retail customers.

Vodacom’s customer base will benefit from Neotel’s extensive fibre assets and enterprise capabilities, which will allow Vodacom to accelerate its fixed enterprise strategy and stimulate greater competition in South Africa’s fixed telecommunications sector.

The combined entity will be able to offer an expanded product range and, as a consequence, enhanced customer choice. The transaction is expected to close before the end of the current financial year, although the requisite regulatory approvals will play a role in this. SENS