Econet will be unbundling Cassava which was essentially the companies Fintech (financial technology) wing. This move will essentially make Cassava one of the biggest companies in Zimbabwe overnight as the company is responsible for products and services such as EcoCash, EcoSure, EcoFarmer, Ruzivo, Steward Bank and Muzinda hub among other companies.
The Chief Executive of Cassava was also quite bullish when speaking to The Herald:
Cassava group chief executive Darlington Mandivenga said the company may not yet be a household name in Zimbabwe but will over the next few weeks become one of the largest companies in the country.
Why unbundle?
Mr Mandivenga didn’t disclose why the unbundling is taking place and honestly it could be for a variety of reasons, but usually, companies unbundle if management believes that the financial results will improve. I think this is the most likely option as the other two options are unlikely.
Naspers is also unbundling with Multichoice and the reason for that is because it seems MultiChoice and its satellite business (DStv) won’t be of huge importance going forward. This is unlikely to be the case with Econet and Cassava as the expectation with Cassava is that the fields they are in will continue to grow and not slow down anytime soon.
Other cases of unbundling that have been seen before including buyouts. When a company buys another for its most valuable divisions but they are not particularly interested in the other divisions within the company they are buying. Again nothing of this sort is happening within Econet so I think we can rule that one out.
