Vodafone's African Unit Seeking Deals to Fuel Tanzania Expansion
(Bloomberg) -- Vodacom Group Ltd. is in talks with the Tanzanian government and other mobile-phone operators about possible deals that will help the company expand in one of its biggest markets.
“Should opportunities present themselves for in-market consolidation in Tanzania, we will have a look if the regulatory environment is favorable,” Chief Executive Officer Shameel Joosub said in an interview. “We’re having discussions with parties to see if there are opportunities.”
Vodacom raised about $225 million to become the first and only telecommunications company to so far list on the stock exchange in Tanzania’s commercial capital Dar Es Salaam last year. The share sale was done at almost the same time as Vodacom’s purchase of a 35 percent stake in Kenya’s Safaricom Plc to solidify its position in East Africa.
The proceeds of the initial public offering could be used to do a deal with one of the other seven carriers in the country, including Millicom International Cellular SA and India’s Bharti Airtel Ltd. Millicom has previously indicated that it would pursue an exit strategy in Africa and Airtel is looking for additional consolidation on the continent, making them potential buy-out targets for Vodacom, Africa’s biggest wireless carrier by market value.
Outside of Vodacom, all the other international operators still need to list at least a quarter of their business on the stock exchange in Tanzania to meet government requirements. Bharti Airtel is currently locked in a battle with Tanzanian authorities over the ownership of its Tanzanian business.
Vodacom’s shares in Johannesburg have gained 4.5 percent for the year, valuing the company at close to 262 billion rand ($21 billion) in Johannesburg. Crosstown rival MTN Group Ltd. is down almost 11 percent for the year. Vodacom Tanzania Ltd.’s equities are down 5.9 percent since the IPO.
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