The Competition Commission has given its go-ahead for the sale of Telkom’s masts and towers business to a consortium led by Actis – but has attached some conditions to the deal.

Telkom shareholders, including the government of South Africa, which owns 40.5% of Telkom, in May voted in favour of selling the Swiftnet business to the consortium made up of Actis and Royal Bafokeng Holdings, a community-owned investment holding company, in a deal that gave Swiftnet an enterprise value of R6.75-billion.

Actis and Royal Bafokeng formed a new entity, called Towerco Bidco, to acquire the stake. The former owns 70% of this entity, with the latter holding the remaining 30%.

Despite the commission’s recommendation that the deal be allowed to proceed, it must still be given the nod by the Competition Tribunal.

“The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market,” it said in a statement.

However, to “address public interest concerns, the merger parties have made procurement commitments to firms that are either small/medium enterprises or that are owned by historically disadvantaged persons for a period of five years from the merger implementation date”, the commission said.

No opposition

“Swiftnet’s core business includes leasing space on its owned mast and tower-related infrastructure to customers, including mobile network operators, enabling such customers to deliver connectivity to their respective subscribers or customers and/or operate wireless networks. Swiftnet also provides wireless in-building solutions, which allow its customers to provide mobile network connectivity within shopping centres, buildings and other public infrastructure and offices in approximately 28 locations across the country,” the regulator said in its statement.

At May’s meeting of Telkom shareholders, 100% of votes cast – representing 82.7% of the telecommunications group’s total issued share capital, were in favour of the sale. Not a single vote was cast in opposition to the transaction.

Telkom Group CEO Serame Taukobong said in March that the sale, once concluded, would mark a “pivotal moment in Telkom’s journey towards unlocking shareholder value and streamlining our focus on core business operations”.

“This divestiture aligns perfectly with our strategy to concentrate on our infrastructure assets while realising the inherent value in non-core holdings… This move underscores Telkom’s commitment to fortifying its financial position, reducing debt and enhancing liquidity,” Taukobong said.