A while back, Liquid Telecom announced plans to acquire South African internet service provider Neotel, in a deal aimed creating the continent’s largest broadband network and business-to-business service. Liquid Telecom, majority owned by Econet Global was to pay $428 Million for the transaction. Econet Global is associated with Zimbabwean Billionaire Strive Masiyiwa.
Liquid has now announced that they have received unconditional approval from the Independent Communications Authority of South Africa (ICASA) to go ahead with the deal. Liquid Telecom is partnering with Royal Bafokeng Holdings (RBH), a South African investment group, which has committed to take a 30% equity stake in Neotel.
Following the deal, Liquid will have a combined network asset and service platform across Eastern, Central and Southern Africa enabling the firm to offer access via a single connection to over 40,000km fibre networks across 12 countries.
Neotel was previously owned by Tata Communications of India who were the majority shareholders and Nexus Connexion (Nexus) as the minority shareholders. Tata Communications acquired the stake in Neotel in 2009 but has in the recent past been looking to dispose of its non-core assets.
Neotel has been up for sale severally with South African telco Vodacom making the initial bids for the company. Vodacom later abandoned the deal citing regulatory complexities and certain conditions not being fulfilled. Vodacom planned to use Neotel’s fixed line network footprint and access to more radio spectrum to roll out faster broadband services. The exit of Vodacom saw the entry of undersea cable provider Seacom and Liquid Telecom with both companies looking to grow their broadband presence across the continent. The firm which was launched in 2006 has in recent years faced turbulent times which also saw its CEO resign over bribery allegations.
