ICASA approves Liquid Telecom's Neotel takeover
$429 million buyout is expected to be completed in Q1 2017
Regulators have approved Liquid Telecom’s acquisition of Neotel in South Africa, imposing no conditions.
Liquid, which is majority owned by Econet Global, will now take control of Neotel from Tata Communications in Q1 2017 in a deal worth $429 million after the Independent Communications Authority of South Africa (ICASA) rubber-stamped the deal.
To fund the deal, first announced in June, Liquid Telecom partnered with Royal Bafokeng Holdings (RBH) who will now take a 30% stake in Neotel.
The acquisition means Liquid will have over 40,000km of cross border, national, and metro fibre networks spanning 12 countries. The deal also includes Neotel’s tier 3 data centres in Johannesberg and Cape Town, which have a combined 1700 square metres of rack space.
Neotel’s network connects with SAT-3, SAFE, SEACOM, EASSy, and WACS cables, and is either an owner or landing partner on all of these subsea cable systems.
Speaking on behalf of Neotel, non-executive director in charge, Kennedy Memani, said: “We welcome ICASA’s approval of this transaction. Leveraging the strengths of Liquid Telecom, Neotel’s staff and customers will benefit from the stability, planned expansion and increased investments into the business. This will enable Neotel to reach its full potential in South Africa and across the African continent.”
It is the latest in a number of recent developments at Liquid Telecom, which secured a $300 million loan last month to fund expansions across the African continent, including the Neotel deal.
On 14 December, Liquid Telecom received approval from regulators in Tanzania to complete its takeover of ISP Raha. It is also in the process of forming a new wholesale joint venture with Botswana Power Corporation.
Nic Rudnick, group CEO of Liquid Telecom, said: “We are delighted to have received regulatory approval to complete this transaction. The combined companies will create an unparalleled footprint covering key markets across the continent, giving Liquid Telecom a significant competitive advantage through the breadth, depth and flexibility of our consolidated networks.
“We will be able to offer African companies the highest quality and most extensive connectivity on the continent. We appreciate the efficiency with which this transaction was dealt with by both ICASA and the Competition Commission.”