Fast-growing and privately held pan-African telecommunications group Liquid Telecom majority owned by Econet Global has agreed to acquire a controlling stake in Neotel for R6,55bn.

The deal comes just months after Vodacom was forced to walk away from acquiring the telecoms company because of concerns from rivals on the impact on competition in the sector.

In terms of the deal, Liquid Telecom is partnering with investment group Royal Bafokeng Holdings (RBH), which has agreed to take a 30% equity stake in Neotel, ensuring the company continues to be empowered at an equity level.

Liquid and RBH are acquiring Neotel from current controlling shareholder Tata Communications and minority shareholders, led by Nexus Connexion.

“The transaction, which is subject to regulatory approvals, is transformative and will create the largest pan-African broadband network,” Liquid Telecom said in a statement.

“Through a single access point, businesses across Africa will be able to access 40 000km of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned.”

In the statement, Liquid Telecom CEO Nic Rudnick said: “Leveraging the strengths of Liquid Telecom, RBH and Neotel, we will offer an unprecedented fibre network with a unique set of services and international connectivity for telecom operators and enterprises across sub-Saharan Africa.

“For the first time, African companies will be able to connect with each other in a cost-effective and reliable way, all on a single fibre network. We will also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic, enabling us to launch exciting new products and services.”

Tata Communications CEO Vinod Kumar said: “Liquid Telecom is the right partner for the next phase of Neotel’s evolution.”

The transaction is subject to approval by South African regulatory authorities and is expected to be completed later this year.