Vodacom and Remgro have agreed to extend by two weeks the date by which the conditions for the acquisition of a 30% interest in Maziv must be satisfied amid prospects of legal action against the prohibition of the R10.2 billion deal.
“Shareholders are advised that the transaction parties have agreed to extend the longstop date from 15 January 2025 to 31 January 2025 to continue discussions with regards to the transaction terms,” the companies said in separate statements today.
Vodacom was prohibited by the Competition Tribunal from concluding the multi-billion-rand merger between it, Dark Fibre Africa (DFA) and Vumatel, to create what would have been the country’s largest fibre operator.
In its ruling late last year, the Tribunal said it would issue the reasons for the decision at a later stage. Both Vodacom and Maziv have been awaiting the reasons behind the prohibition to consider their options, which Vodacom said may may include an appeal in the Competition Appeal Court.
Vodacom proposed acquisition of a 30% interest in a newly formed entity Maziv Proprietary Limited (Maziv) that would house all the material assets owned by Community Investment Ventures Holdings (CIVH), including Vumatel and Dark Fibre Africa (DFA).
CIVH is the Remgro and New GX-controlled parent company of fibre infrastructure operators DFA and Vumatel.
The deal would see Vodacom buying DFA and Vumatel from Remgro, a Stellenbosch-based investment holding company, through a combination of R6bn cash and the contribution of some transmission access fibre network infrastructure at a valuation of R4.2bn, which would effectively create Maziv, set to be the largest fibre infrastructure player in South Africa.
Maziv will be partially owned by Vodacom, while the South Africa’s largest mobile operator will simultaneously hold on to its mobile business, long-haul fibre assets, and retail ISP business.
Vodacom said its merger bid would have resulted in the investment of about R10bn over five years, mostly in low-income areas. It would also have run fibre past a million homes during the same period, while also creating 10 000 jobs.
Simultaneously, it would have established a R300 million enterprise and supplier development fund to prioritise SMME development and provided high speed internet to over 600 adjacent schools and police stations at no cost.
Maziv said it was also disappointed by the outcome but respected the Tribunal’s process.
Concerns were raised that Vodacom will have main control over the merged company, even though it will only own between 30% and 40%, because it will be providing funding for investment.
The Tribunal’s decision to prohibit the proposed merger followed an extensive hearing that took place over 26 days between May 20 to September 27. The parties also made further written submissions after this, the last of which was received by the Tribunal on October 16.
During the hearing, the Tribunal heard evidence from various factual witnesses including from each of the merging parties, Frogfoot Networks, Telkom Consumer and Small Business and Mobile Networks of Telkom Consumer and Small Business, divisions of Telkom, MTN and Rain. At the Tribunal’s request, Hero Telecoms also provided factual testimony.
The Competition Commission had opposed the merger on the basis that it would create a monopoly that could control pricing, and it would also see poor people lose out on cost-effective broadband connectivity.
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