The Competition Commission has approved the proposed acquisition of Independent News & Media South Africa by Sekunjalo Independent Media, it was announced on Sunday.
The final transfer of ownership was expected to be completed on 15 August, Independent South Africa CEO Tony Howard said in a statement. The approval of the deal was subject to conditions, Sekunjalo said.
“These conditions are largely designed to ensure that the [Public Investment Corp, PIC], as an institutional investor with existing ownership interests in other print media operators, does not allow itself, through its common ownership links, to become an unwitting conduit for co-ordinated effects between the competing print media operators in the future,” it said.
“The conditions require the maintenance of appropriate boundaries between internal PIC managers of each media owner investment and separate director appointments, to the extent that PIC does appoint representatives to any media owners’ board.”
Sekunjalo group chairman Iqbal Surve said he was delighted this important milestone in the completion of the transaction had been reached.
It brought him a step closer to placing a South African media asset back in the hands of South African owners, which included a broad cross section of society.
He expressed his thanks to the Competition Commission for its efficient and forthright handling of the matter.
Independent was bought from Anglo American by the Irish holding company, Independent News and Media, in 1994.
Independent News & Media in Ireland confirmed on 17 June that its shareholders had voted in favour of the sale of the media group to Sekunjalo, in a deal said to be worth R2bn.\
The two shareholders of Independent in South Africa would be Sekunjalo , with 75%, and the government employees’ pension fund acting through the PIC, with 25%. This would ensure that the business was “firmly in South African hands”, Surve said at the time.
He said 63% of Sekunjalo Independent Media’s shares would be held by Sekunjalo Investment Holdings; Cosatu investment company Kopano Ke Matlaka, represented by Collins Matjila; the SA Clothing and Textile Workers’ Union Investments Group, represented by Andre Kriel; the Food and Allied Workers’ Union, represented by Basebenzi Investments and Katishi Masemola; and employees, via a special purpose vehicle.
The other 37% would be held by a number of “broad-based value-adding partners”. These included the Black Business Chamber (Western Cape) and various independent South African women’s business community organisations, represented by Lindiwe Barbara Ngcobo and Manemele Maria.
Sekunjalo Digital Media would help drive a digital and mobile growth strategy and the Mvezo Development Trust, represented by Mandla Mandela, would provide for the development of the communities of the Eastern Cape.
They were joined by the Umkhonto we Sizwe Military Association (through the Military Veterans’ Trust) and the Western Cape Development Trust, which would focus on the provision of bursaries for journalists from black communities.
Other shareholders were prominent entrepreneurs and business people such as Sandile Zungu, and media and advertising personalities Tim Modise and Groovin Nchabeleng, from the Blue Print Group.
“The Sekunjalo consortium will at all times have control of [Independent], with a number of funding partners sharing in the equity of the company,” said Surve.
Funding would come from Sekunjalo, banks, the trade union investment companies, the government pension fund, and a Chinese consortium.
“To ensure that the business has sufficient capital resources to reinvest in vernacular titles, digital strategy, reinvigorating existing titles and an African growth strategy, additional funding has been arranged which may see a further shareholding/investment of 20% placed with the Chinese consortium,” he said.
On Sunday, he said that, subsequent to the conclusion of the original sale agreement, two-third party Chinese investors had reached an agreement with Sekunjalo in terms of which they would acquire a minority stake in Independent post merger
They would, in effect, acquire a portion of Sekunjalo’s stake in Independent, through a special-purpose vehicle.
The commission had been notified of this transaction and it was expected that approval, on terms similar to those applicable to the original transaction, would be granted in the near term, said Surve.
Independent owns the Cape Times, the Cape Argus, the Weekend Argus, the Daily Voice, the Star, Pretoria News, Saturday Star, Sunday Independent, Diamond Fields Advertiser, Weekend Pretoria News, Daily News, the Mercury, Post, Independent on Saturday, the Sunday Tribune, the Zulu daily newspaper Isolezwe, and its Saturday and Sunday editions.
It also owns a number of weekly community newspapers in the Western Cape, and has investments in the community newspaper markets in KwaZulu-Natal and Gauteng.
It also owns and runs the IOL website and publishes three Conde Nast international magazine brands: House & Garden, GQ and Glamour. — Sapa