Vodafone finally clears way to control of Vodacom?
A South African court ruled late last Sunday night that Vodacom, South Africa's largest mobile phone operator, could proceed with a stock market listing after throwing out a last-minute bid by trades unions to block the deal, the Financial Times says.
This looks like the final hurdle to Vodafone Group finally taking control of South Africa’s largest mobile network, which is plans to use as a bridgehead into other African markets. Telkom, the incumbent operator, will sell 15% stake it holds to Vodacom for $2.1 billion. Telkom will hand the its remaining 35% stake to its shareholders.
Vodafone assuming majority control of Vodacom has been contested since it was first announced early last October. Prior to the announcement, the sale had been under negotiation for many months.
Last week it was the leftwing Confederation of South African Trades Unions – Cosatu that took legal action to stop the listing after yet another surprising turn of events. On Friday, the telecoms regulator argued that public hearings and its approval were required before the deal could progress, reversing an earlier ruling and clearing the way for Cosatu’s court challenge.
However, the situation remains tense as the incoming South African Prime Minister, Jacob Zuma, enjoys the backing of trades union and the Communist Party, which helped him succeed in the bitter struggle for power within the African National Congress. However, Zuma appointed Trevor Manuel, the former finance minister, to be head of a new planning commission, which reassured investors, the FT says.
The trades unions said they intended to continue to campaign against the deal, promising to boycott Vodacom.