New Street: Vodacom (Neutral, TP: ZAR140 +8%) Acquiring Vodafone Egypt and fibre assets in SA
Vodacom has announced two M&A transactions today. The first one involves the acquisition of Vodafone’s 55% stake in Vodafone Egypt at a valuation of 6.5x EBITDA for US$2.7bn, 80% of which will be equity based, and 20% cash. In addition, for ZAR9bn of cash (and an injection of R4.2bn of fibre assets), Vodacom will acquire a 30% stake in a fibre asset in South Africa. In this note we run through the details of both transactions, and summarise our overall view on these transaction.
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