Vodacom’s acquisition of a 30% interest in Maziv has passed another hurdle with approval from the Competition Appeal Court.
Vodacom and Remgro said on Friday that after a hearing at the Competition Appeal Court on July 22, the court had approved the transaction subject to the set of revised conditions proposed by the merger parties and the Competition Commission.
Remgro said it was pleased with this positive outcome, which represented a milestone in the fulfilment of the conditions precedent for the transaction.
Vodacom received conditional approval from the Independent Communications Authority of SA in November 2022 and implementation of the transaction now awaits Icasa’s unconditional approval.
Before facing the Competition Appeals Court over their R13bn fibre merger, Vodacom and Remgro amended the terms of their agreement. Under the new configuration, Remgro said its telecom unit, Community Investment Ventures Holdings (CIVH) operating as Maziv, was valued at R36bn, inclusive of internet service provider Herotel.
According to the original terms, SA’s largest mobile operator was to take a 30% stake in Maziv, together worth an estimated R13bn with the option of 40%. That option is now down to 34.95%.
Vodacom will, under the revised transaction terms contribute its fibre to home, fibre to the business, and business-to-business transmission access fibre network infrastructure valued at R4.9bn, in return for new shares in Maziv. It will also subscribe for new shares in Maziv for R6.1bn of cash and acquire additional Maziv shares from CIVH sufficient to reach the 30% shareholding mark.
Vodacom expects to buy shares from CIVH at a cost of R2.5bn.
The JSE-listed firms have been fighting for almost four years to get the deal over the line, even receiving backing from trade, industry & competition minister Parks Tau.
Earlier in July, the Competition Commission said it had reached an agreement with Maziv on revised conditions that “substantially remedy the competition concerns raised by the commission in its recommendation to the Competition Tribunal that the Vodacom-Maziv merger be prohibited”.
The merger of the two fibre businesses was rejected by the tribunal in October. It would have seen the transaction, announced in November 2021, approved by SA’s telecom regulator but failed to gain the backing of the Competition Commission, which conducted an investigation that took almost 22 months.
Overall, this deal is expected to boost fibre infrastructure investment in SA.
Vodacom is committed to investing R14bn in SA’s digital infrastructure, including rolling out fibre to 1-million homes in low-income areas and creating 10,000 jobs.
Maziv had committed to capital expenditure of at least R10bn over five years, including rolling out fibre infrastructure past at least 1-million new homes in low income areas. /With Mudiwa Gavaza
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