September 2, 2008

Vodacom Acquires Gateway for $700 Million

Vodacom, a South Africa-based mobile operator which is half-owned by Vodafone of the UK, has agreed to acquire the carrier services and business network solutions subsidiaries of Gateway Telecommunications, for an enterprise value of approximately $675 million plus a makewhole payment of approximately $25 million in relation to Gateway's high-yield bond.

Gateway is an independent provider of interconnection services via satellite and terrestrial network infrastructure for both African and international telecommunications companies.

According to the agreement, subsidiaries nominated by Vodacom Group will purchase from Gateway Telecommunications 100% of the shares in Gateway Telecommunications plc, Gateway Communications (Pty) Ltd, Gateway Communications Mozambique LDA, Gateway Communications (Tanzania) Ltd and GS Telecom (Pty) Ltd and their respective subsidiaries, subject to customary conditions.

The transaction remains subject to certain conditions, including approval from the South African Reserve Bank and the relevant regulatory and competition authorities. UBS Investment Bank acted as exclusive financial adviser to Vodacom on this transaction.

Pieter Uys, CEO of Vodacom Group, said: "The acquisition of Gateway reflects Vodacom's strategy to reposition itself as a leading pan-African provider of communications services and to diversify from its current status as primarily a mobile-centric network operator.

"We believe that Gateway's significant presence across Africa will allow Vodacom to tap into the huge potential for growth in business services and connectivity and will enhance our position with multinational corporations."