Vodafone’s $14bn African unit under review

Vodafone Group is considering its options for its African business following increased pressure from investors to improve performance, according to people familiar with the matter.

The company is exploring ways to extract more value from its 65% stake in Vodacom Group, with options including a merger with other operators, divesting some assets in certain markets, selling a stake in the company or combining its African operations with Etisalat. Vodacom currently has a market value of approximately $14.4 billion on the Johannesburg Stock Exchange.

Despite Vodafone seeing the African unit as a core part of the group, the exercise shows that the company is willing to study a wide range of alternatives as it looks for ways to stem the decline in its shares. Last year, the company sold a stake in Frankfurt-listed Vantage Towers to a private equity consortium for $17.3 billion, and has been consolidating its interests on the continent under Vodacom. Vodafone’s holding in the African business may also attract interest from other bidders.

There is no certainty that the deliberations will lead to a transaction. A representative for Vodafone said that Vodacom is “a strong business that is an important part of Vodafone” and that there are no ongoing discussions about a potential sale.