The decision by the Competition Tribunal to block Vodacom’s acquisition of a co-controlling stake in fibre operator Maziv is headed to the competition appeal court.
Even though the tribunal hasn’t yet furnished its reasons for agreeing with the Competition Commission that the deal should be prohibited, the merging parties have decided to take the matter on appeal.
They will supplement their notice of appeal to the court upon receipt of the tribunal’s reasons document, Vodacom and Remgro, which owns a big stake in Maziv through CIVH, said in separate statements issued via the JSE’s stock exchange news service on Tuesday.
“Shareholders are further advised that the transaction parties remain in discussions with regards to the transaction terms,” Vodacom said without elaborating. “Should agreement not be reached, the transaction may be terminated.”
While many internet service providers have welcomed the tribunal’s decision to prohibit the deal, the decision has drawn scorn from both Remgro and Vodacom.
Vodacom Group CEO described the decision to block the deal as a “travesty” for South Africa. He 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.
‘No sense’
“We are currently considering other strategic options, but 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”.
Read: Vodacom and Maziv: a contrarian viewpoint
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
