Vodacom South Africa has announced big changes to the terms of its planned acquisition of Vumatel parent Maziv as it works to get the deal over the line.
Under the new terms, Vodacom will buy a maximum 34.95% stake in Maziv, down from 40% previously, while the financial terms of the deal have also been adjusted.
The news follows an agreement between Vodacom, Maziv controlling shareholder CIVH and the Competition Commission aimed at dealing with the regulator’s concerns about the impact of the transaction on competition in South Africa’s telecommunications sector. The commission had previously recommended to the Competition Tribunal that the deal be blocked but has now changed tack and will support the transaction. The tribunal also recommended that the merger be prohibited on competition grounds.
The revised deal means Vodacom will:
- Contribute high-speed fibre to home, fibre-to-the-business and business-to-business transmission access fibre network infrastructure valued at R4.9-billion in return for new shares in Maziv;
- Subscribe for new shares in Maziv for R 6.1-billion in cash; and
- Acquire additional Maziv shares from CIVH sufficient to increase its shareholding to 30%.
“In anticipation of the injection of Vodacom cash and assets, Maziv intends to reset its capital structure by declaring a pre-implementation dividend of up to R4.2-billion,” the parties said. “Should this dividend be declared, Vodacom’s cash consideration will be reduced by up to R1.3-billion.”
“Vodacom’s aggregate transaction price will therefore amount to R12.2 billion (assuming Maziv declares the full pre-implementation dividend). This represents a pre-acquisition transaction equity value of R29.8-billion, or R34-billion if no pre-implementation dividend is declared.”
Herotel
Vodacom will also subscribe for new additional shares in Maziv as consideration for its 30% of the Maziv stake in Herotel for R600-million in cash. Maziv owns just under 50% of Herotel.
“Considering Herotel, this increases the overall transaction equity valuation, post the full pre-implementation dividend, from R29.8-billion to R31.8-billion (R36-billion if no pre-implementation dividend is declared).
“Maziv is currently in the process of obtaining approval under the Competition Act to acquire an additional 49.93% of Herotel. Should such approval be obtained, Vodacom has agreed to acquire additional shares in Maziv for its 30% proportion of the consideration based upon a fair market valuation conducted by independent banks, subject to a minimum subscription value of R800-million,” the parties said.
Read: Finally! Tribunal unpacks why it blocked Vodacom’s Vumatel deal
“Vodacom’s option to increase its investment in Maziv (which was originally for an additional 10%) is now for up to 4.95 %. Should the option be exercised, Vodacom will own 34.95% of the issued ordinary shares in Maziv.”
The matter will now proceed to a competition appeal court hearing set down for next week at which the Competition Commission is now unlikely to raise objections. – © 2025 NewsCentral Media
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