Vodafone Egypt (VFE) has informed Telecom Egypt (ETEL) that Vodafone Group (VFG) has received an initial offer from Vodacom for the transfer of VFG’s stake in VFE to Vodacom.
Huh?🤷♀️ Vodafone Egypt & Vodacom are both subsidiaries of Vodafone Group.
Vodafone Egypt is currently owned by Vodafone Group (55%) & by ETEL (45%).
Vodacom wants to buy Vodafone Group’s stake (55%) in Vodafone Egypt.
Why is this important🤔 The current shareholders’ agreement grants ETEL “enhanced rights & benefits”, whereby ETEL gets preferential treatment during major shareholder restructuring, & has the option to purchase the 55% stake in Vodafone Egypt ahead of Vodacom. However, an acquisition by ETEL would give it full control of two of the four mobile operators in the country, posing a potential concentration risk to the sector. ETEL closed +0.73% yesterday.