A tie-up would create the biggest telecom operator in the Middle East and Africa. It would also bring together the second-biggest carrier in the continent.
The Emirates Telecommunications Group (Etisalat) is considering a potential investment in Africa’s Vodafone Group PLC’s business, according to people briefed on the matter.
A state-owned carrier in Abu Dhabi is considering making a bid for Vodafone’s stake in South Africa’s Vodacom Group, people familiar with the matter said. The shares of the company rose 7.1% in lunchtime trading.
Etisalat is considering buying some of Vodacom’s assets in different countries or merging its African operations with the South African carrier, according to people familiar with the matter. The company is still in the early stages of assessing the various options it could pursue, these people said.
The combined company would be the biggest telecom operator in the Middle East and Africa, and it would be the second-biggest carrier in the continent. Since it started consolidating its African operations under Vodacom, which also provides services in countries such as South Africa and Tanzania, Vodafone has been able to gain a significant foothold in the continent.
Middle Eastern telecom companies have been making acquisitions this year. Etisalat increased its stake in Saudi Arabia’s Mobily, while Qatar’s Ooredoo QPSC is reportedly in the process of selling its network towers.
What Bloomberg Intelligence says:
Etisalat’s possible acquisition of Vodafone’s 60% stake in African carrier Vodacom (reported by Bloomberg News) may face many obstacles as the governments of Morocco, South Africa and Kenya — as well as regulatory and competition authorities — would need to sign off. An agreement could yield considerable synergies for Etisalat, with emerging-market telecom and mobile-money expertise adding value to its operations outside the UAE.
—John Davies, BI telecoms analyst.
Source: Bloomberg L.P.