The Competition Commission has recommended to the Competition Tribunal that the proposed merger between Dimension Data’s Internet Solutions (IS) and three divisions of MWeb be approved, with conditions.
The recommendation was made by the commission in a meeting on Tuesday. The commission has imposed the condition that no more than 35 employees of the merged entity should be retrenched as a result of the deal.
IS announced in September that it plans to buy MWeb Business as well as the core network assets of the MWeb Internet service provider business and Optinet. The businesses are owned by Naspers through its pay-television subsidiary MultiChoice.
Discussions between the parties had been taking place for at least 10 months. TechCentral broke the news in December 2013 that Dimension Data and Naspers had been engaged in talks about a merger of some sort.
Dimension Data said the acquisition of the three the MWeb network assets and of MWeb Business and Optinet would result in the transfer of the network assets and bandwidth contracts of MWeb Connect to IS. MWeb Business, Optinet and MWeb Connect engineering and support employees would be transferred to Internet Solutions, it said.
“MWeb Business and Internet Solutions will be able to serve this market segment more competitively and ensure that the ICT offerings for this sector are designed and supported in a way that is economically viable and, importantly, support them in operating and growing their business,” said Dimension Data Middle East and Africa CEO Derek Wilcocks in a statement.
“There is a strong strategic and cultural fit between MWeb Business and Internet Solutions and the combined entities will have the scale to compete in the small and medium enterprise (SME) market, while the SME market will benefit from access to a wider range of services, more market competitive prices and greater support for their ICT.”
MWeb’s Optinet, which provides services to Naspers group companies, will continue to do so. MWeb Business is focused on the SME market in South Africa and has 5 000 clients.
Dimension Data said, too, that it would combine the Wi-Fi network assets of IS-owned Wi-Fi provider AlwaysOn with the Wi-Fi assets of MWeb WiFi. The AlwaysOn retail consumer business would continue to operate as a separate entity.
Employees of MWeb WiFi, as well as AlwaysOn employees who manage the AlwaysOn network would be employed by a new business called WirelessCo. — (c) 2014 NewsCentral Media