In a surprising turn of events, the proposed acquisition of an equity interest in Maziv Proprietary Limited by Vodacom Proprietary Limited faces a potential roadblock as the Competition Commission issues a non-binding recommendation to prohibit the transaction. This announcement follows an intricate series of negotiations and amendments to the deal, adding uncertainty to the fate of this significant merger in South Africa’s telecommunications landscape.
The journey began on 10 November 2021 when Remgro Limited announced a transaction between Community Investment Ventures Holdings Proprietary Limited (CIVH) and Vodacom, which aimed to establish Vodacom’s equity interest in Maziv. This entity serves as the custodian of crucial assets owned by CIVH, including Vumatel and DFA. As outlined in the transaction terms, Vodacom is slated to acquire a substantial stake of between 30% and 40% in Maziv, thereby gaining access to specific Vodacom fiber assets detailed in the original announcement.
However, the realization of this deal rests upon regulatory approval from South African authorities, and recent developments have introduced a significant hurdle. The Competition Commission, an independent institution that promotes competition and enforces competition laws, has released a non-binding recommendation that suggests prohibiting the transaction. This recommendation marks a pivotal juncture in the merger process, as the Competition Tribunal is tasked with making the final decision.
The Competition Tribunal, known for its adjudication of large merger transactions, will now be tasked with evaluating the merger’s potential impact on the competitive landscape and broader economy. In this process, both Remgro and CIVH, the key players on one side, and the Competition Commission on the other, will present evidence to support their positions. The outcome of this evaluation will determine whether the transaction is approved, conditionally approved, or prohibited.
Remgro and CIVH, undeterred by this recent setback, remain committed to the merger and are optimistic about its potential to drive positive change. They firmly believe that the merger could usher in a new era of competition and inclusivity within South Africa’s telecommunications sector. Vodacom’s substantial investment of over R10 billion is positioned to break down barriers, allowing Vodacom-owned fiber assets to be shared openly and transparently with the market, fostering healthy competition.
Moreover, the investment is anticipated to extend fiber infrastructure to underserved areas, creating a domino effect of job creation and the emergence of small to medium enterprises. A dedicated fund designed for this purpose is expected to facilitate economic growth and participation across various sectors.
