17 September 2018 by and

Largest BEE deal in ICT sector drives transformation

On 14 September 2018, Vodacom Group and YeboYethu completed a R16.4 billion BEE transaction – the biggest BEE deal in the ICT sector to date – in which Cliffe Dekker Hofmeyr (CDH) was privileged to have acted as lead legal advisor to both Vodacom and YeboYethu.

This pioneering deal is a tribute to the 10-year-long journey that Vodacom, YeboYethu and CDH have collaboratively walked together, to provide better opportunities for South Africans and drive transformation in the country.

Christopher Baird, Director in the Corporate and Commercial Practice at CDH and lead legal advisor, says that he is very proud to have played a role in the deal. “From their first BEE deal – when YeboYethu was initially formed in 2008 – through to this one, CDH have been beside Vodacom and YeboYethu throughout the journey.”

The significance of the deal for transformation was highlighted by Verushca Pillay of CDH's BEE Sector and Director in the Corporate and Commercial Practice, who explains how the deal has played a vital role in progressing transformation. “In addition to delivering the best returns to shareholders of any listed BEE deal, the deal will see significant value being delivered to over 85,000 black shareholders and 8,500 Vodacom staff. By ultimately transferring economic ownership into the hands of black South Africans, deals of this nature are vehicles for the practical fulfilment of transformation,” she says.

Nckubeko Mbambisa, Director in the Corporate and Commercial Practice, who also advised on the deal, adds that the current YeboYethu deal proved to be extremely profitable for investors. “Through YeboYethu, for each share owned – having been originally issued at only R25 each – investors received a dividend of R73 and will now have a stake in Vodacom Group. The deal provides shareholders with greater exposure to foreign investments through Vodacom Group shares.”

This latest deal comes just as the initial YeboYethu deal was due to end, says Baird. “The first YeboYethu deal, after running successfully for 10 years, was due to end in October. And with an ending comes a new beginning, as this latest deal – also carrying a 10-year term – sees the commencement of our next chapter together with Vodacom and YeboYethu.”

He concludes that deals of this nature continue to be critical for driving greater economic transformation. “CDH is proud to have collaborated on this deal with Vodacom and YeboYethu, and to have been a part of this innovative deal. We remain committed to the facilitation of commercial transactions which align investors’ expectations and the desired commercial outcomes with the objectives of transformation.”

For 25 years, CDH has worked with Vodacom to change the lives of South Africans. Over the last 10 years, through the YeboYethu B-BBEE deal, more than 90,000 South Africans were empowered with shares on the JSE. We caught up with some of the shareholders to find out what this landmark deal means to them.

 

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