In a fascinating twist in the ongoing saga that is Vodacom’s effort to acquire a co-controlling stake in fibre operator Maziv, trade, industry & competition minister Parks Tau has filed a notice of motion to appeal the Competition Tribunal’s decision to prohibit the deal.
TechCentral has learnt that Tau filed a notice of appeal on Tuesday with the competition appeal court in which he is seeking to have the tribunal’s decision reviewed.
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The move is particularly interesting given that the competition authorities – including the tribunal and the Competition Commission, which had recommended to the tribunal that the deal be blocked – fall in Tau’s political purview.
It’s not the first time that the minister has voiced his support for the transaction, despite the opposition from the competition regulators.
Tau had participated in the tribunal’s proceedings and signalled his support for the transaction on public interest grounds. He noted in a media statement at the time that the deal was blocked that the merging parties had committed to “substantial public interest conditions to significantly boost investments and growth of fibre and mobile connectivity in South Africa” and that this was “in line with South Africa’s priorities for industrialisation, re-industrialisation and investment to foster economic growth and create jobs”.
In his notice of appeal, Tau indicated that he wants the merger between Vodacom and Maziv to be approved. The minister’s notice to appeal follows a similar move by the merging parties, which are also appealing the tribunal’s decision.
Supplementary affidavits
All three parties have said they will file supplementary affidavits to the competition appeal court once the Competition Tribunal has published its reasons for prohibiting the deal, which are expected soon.
The competition regulators have come under heavy fire for the time they took – about three years – to reach a decision to prohibit the transaction. The tribunal’s decision to block the deal has also been criticised by the merging parties, including Vodacom, though the move appears to enjoy wide support in the internet service provider community.
Vodacom Group CEO described the decision to block the deal as a “travesty” for South Africa.
Joosub said earlier this month on a call with journalists that it was particularly disappointing given that the proposed deal — which would have seen Vodacom directly invest R6-billion for a co-controlling 30% stake in Maziv (with the option to increase this to 40%) as well as contributing its own fibre assets to the merged business — was supported by communications regulator Icasa, the department of trade, industry & competition and even some of Vodacom’s rivals.
“It’s a travesty for South Africa that we lost this opportunity for such a material investment, which would have been between R14-billion and R17-billion in investment plus an additional R25-billion in capex. It’s a major, major loss for the South African fibre industry,” Joosub said.
Pieter Uys, chairman of Maziv and a senior executive at Remgro, said the tribunal’s decision made “no sense”.
Uys told the Sunday Times on 17 November that the tribunal’s decision was “not the message we want to send out to the world”.
“The president (Cyril Ramaphosa) stands up every year and says he’s calling industry to commit to infrastructure investment. This is a perfect example of infrastructure investment, and the public interest benefits we’ve committed to make it a no-brainer,” Uys said. – © 2024 NewsCentral Media