Fibre operator Frogfoot Networks and its sister company Vox Telecommunications – both part of Vivica Group – have been ordered by the Competition Tribunal to hand over documents related to its probe into a fibre transaction involving Vumatel parent Maziv.
The tribunal said on Monday that it has ordered Vox – subject to a confidentiality regime – to give Vodacom and a company called Business Venture Investments (BVI – effectively, Vumatel parent Maziv) access to information claimed as confidential that they supplied to the Competition Commission during its investigation into the deal. These document were referred to by the commission in its recommendation to prohibit the deal, which would see Vodacom investing billions of rand and assets into Maziv in exchange for a stake of as much as 40%.
In terms of the tribunal’s order, the documents will be handed over only to the external legal representatives and independent economic experts of the merger parties. They must also provide “appropriate, signed confidentiality undertakings” before the documents can be handed over.
“In August 2023, the commission, which investigates proposed large merger transactions and refers such to the tribunal for adjudication, recommended to the tribunal that the proposed merger should be prohibited. During its investigation into the merger, the commission received submissions from various third parties including Frogfoot and Vox,” it said in a statement.
“Vodacom and BVI on Wednesday applied to the tribunal for access to all submissions, documents and data provided to the commission by Frogfoot and Vox during the merger investigation. Frogfoot and Vox opposed the applications.
“In terms of the tribunal’s orders, issued today (Monday), both Frogfoot and Vox must provide Vodacom and BVI’s independent advisors with all the information contained in, referred to or relied upon in the commission’s merger report, which they had claimed as confidential, barring the information contained in one paragraph of the commission’s report relating to Vox and a letter submitted by Vox to the commission.
‘Limited access regime’
“The tribunal’s orders further set out a limited access regime relating to any other information claimed as confidential by Vox and Frogfoot and that does not fall within the abovementioned category.”
Last August, soon after the Competition Commission made its recommendation that the deal be blocked, Maziv parent company CIVH and CIVH controlling shareholder Remgro indicated they were prepared to make further concessions to the competition authorities to get the deal, worth R10.2-billion, across the line. Vodacom agreed to buy 30% of Maziv for R6-billion in cash. It will also contribute R4.2-billion in fibre network assets to Maziv.
Pieter Uys, a senior executive at Remgro who also serves as chairman of CIVH, said he remained hopeful that the deal would get green-lighted by the Competition Tribunal, despite the commission’s objections.
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The commission’s decision came as a surprise to the companies involved; they had expected it to be approved with conditions.
“There are no concerns that have been raised in the past 18 months that cannot be solved through obligations and conditions. I am positive we are going into a process that is more interactive and structured,” Uys said of the tribunal’s work.
He said that although Maziv didn’t need the capital injection from Vodacom, the billions of rand that South Africa’s largest telecommunications operator would inject into it would dramatically accelerate Vumatel’s ambition to connect underserviced areas, including townships, with uncapped fibre internet. He said the business would be able to achieve in three to four years what it would take it a decade if the Vodacom investment were to be scuppered. — © 2024 NewsCentral Media
