Vodafone Group faces an unexpected hurdle in its plans to advance into Africa, the Financial Times reports. Last October it agreed with the South African government to acquire an additional 15% in Vodacom, its subsidiary there, which it owned equally and jointly with the state-owned incumbent, Telekom. Vodacom was to pay $2.5 billion.
Now the deal has been challenged in court by the Communication Workers Union, which is seeking to prevent the deal on the grounds it had not been consulted sufficiently.
"We are not happy that the [controlling stake] is being sold to a foreign company," Gallant Roberts, general secretary, told the Financial Times.
After the union\'s announcement, the influential South African Communist Party called on the government "to urgently review, and preferably reverse, this deal", saying it was not in the national interest.
Only about 550 of Vodacom\'s 6,700 employees are members of the union but it represents 29,000 workers across the sector, including 8,400 at Telkom.
Vodacom has pledged that the transaction will not result in job losses.
Telkom said it would oppose the union\'s court application. Vodafone declined to comment, the FT says.