Emirates Telecommunications Group, also known as Etisalat, is exploring a potential investment in Vodacom Group as it seeks to boost its international footprint, people familiar with the matter said.

The Abu Dhabi carrier is studying the feasibility of an offer for part or all of Vodafone Group’s stake in Johannesburg-listed Vodacom, the people said, asking not to be identified because the information is private.

Vodafone owns roughly 60% of the company. Shares of Vodacom jumped 7.1% as of 1.38pm on Wednesday, on track for the biggest daily gain since March 2020, giving it a market value of about R248-billion. Vodafone shares pared earlier losses and were down 0.1% in London.

Etisalat is also weighing the possibility of combining some of its own African operations with Vodacom or buying Vodacom assets in specific countries, the people said. It’s in the early stages of weighing which path to pursue, and could also consider other forms of cooperation, according to the people.

Vodafone has been steadily consolidating its African interests under Vodacom, which provides telecommunications services in countries including South Africa, Tanzania and the Democratic Republic of Congo. Etisalat became Vodafone’s largest shareholder earlier this year and is keen to leverage this position as it plots an expansion of its own business in Africa, according to the people.

Deliberations are ongoing and there’s no certainty they’ll lead to any transactions. A spokesman for Etisalat said the group is scanning the market for opportunities in line with its strategy to grow in part through acquisitions, though there is “no such project in progress at the moment”.

Vodafone stake

Representatives for Vodafone and Vodacom declined to comment.

Etisalat disclosed in May that it had spent US$4.4-billion for a 9.8% stake in Vodafone. It announced Wednesday it had it increased its holding to 11%. The Middle Eastern company is the controlling shareholder of North African carrier Maroc Telecom, which has a market value of about $9.5 billion in Casablanca.

Telecoms companies in the Middle East have been stepping up dealmaking this year. Etisalat has been working to boost its shareholding in Saudi Arabia’s Mobily, while Qatar’s Ooredoo QPSC is working on a sale of its network towers and is also considering carving out its data centre unit. — Dinesh Nair, Vinicy Chan and Loni Prinsloo, with assistance from Ruth David and Abeer Abu Omar, (c) 2022 Bloomberg LP