Vodacom Group announced that it has agreed terms to acquire a strategic stake in the fibre assets of Community Investment Ventures Holdings (CIVH), the owner of Dark Fibre Africa and Vumatel. The deal is expected to transform its South African fibre business and accelerate the roll-out of broadband infrastructure.
Subject to regulatory approvals, Vodacom Group will hold a co-controlling 30 percent equity interest in a newly formed InfraCo entity into which all of the material assets currently owned by Dark Fibre Africa and Vumatel will be transferred, in addition to certain Vodacom-owned fibre assets. Vodacom has an option to acquire an additional 10 percent stake in InfraCo to take its holding to 40 percent.
The operator will pay for the transaction through a combination of ZAR 6 billion cash and the contribution of its fibre-to-the-home, fibre-to-the-business and B2B transmission access fibre network infrastructure to the InfraCo, at a valuation of ZAR 4.2 billion, in return for new shares in InfraCo. Vodacom will acquire further (secondary) shares from CIVH sufficient to increase its shareholding to at least 30 percent in InfraCo at a pre-agreed formula.
Vodacom already works with the network operators to access their infrastructure for its fixed broadband services. Reports of a potential takeover have been circulating for over a year, as Vodacom searched for ways to accelerate its fibre roll-out. Vodacom's own fibre network passed 139,000 homes and businesses at the end of 2020, up 39.8 percent over the year.
The transaction is expected to enhance and scale Vodacom’s fixed offerings across both the consumer and business segments and leverage a shared cost model to accelerate the provision of open-access infrastructure in South Africa. Ultimately, the South African consumer will benefit from the fresh capital injection and shared cost approach as it will significantly scale-up the fibre reach of InfraCo's various fibre brands, including in smaller towns, Vodacom said.
