South Africa: Japanese Giant NTT to Buy Didata in R24 Billion Deal

Computing

SA's biggest takeover deal so far this year was announced yesterday with Japanese telecom giant Nippon Telegraph & Telephone (NTT) acquiring SA's Dimension Data for £2,1bn (about R24bn). The deal will help Japan's top telecoms operator get into the fast- growing African market for cellphone and IT services.

Japanese companies have been slow to enter Africa, which offers huge potential growth in mobile telephony and IT, thanks to rising personal incomes, a growing middle class and improving infrastructure. Didata operates in 49 countries in Europe, Asia and Africa.

The boards of directors of both NTT and Didata unanimously recommended the all-cash offer for 100% of the shares, the companies said. Didata, which traded at a high of R70 a share in September 2000, has seen a strong recovery over the past few years.

Didata chairman Jeremy Ord said that NTT's network carrier capabilities and assets, coupled with Didata's expertise in global system integration, created a powerful and unprecedented combination of capabilities and skills.

"We believe our alliance with NTT will now allow Dimension Data to accelerate our medium- and long-term strategy at a rapid pace," Mr Ord said.

Rand Merchant Bank said the deal would lead to a R12bn inflow to SA, which would be positive for the rand. The transaction is expected to be bedded down within the next three months.

Didata CEO Brett Dawson said NTT would keep the business, including its management, intact and it would remain in SA although it would delist from the JSE.
NTT will finance the acquisition through a combination of its own cash and debt. The deal would mark the largest acquisition of a firm in sub-Saharan Africa by a Japanese company. Didata said Venfin DD Holdings and Allan Gray, which collectively own 50.95% of Didata's issued shares, and the directors, who own 1.06%, supported the bid.