Vodacom and Remgro push fibre merger completion date to end of 2024
If the deal is approved by the Competition Tribunal it will create one of SA’s largest fibre providers
Vodacom and Remgro have extended the completion date for a deal to merge the two groups’ fibre infrastructure assets into a newly formed company.
Remgro’s telecoms unit CIVH (Community Investment Ventures Holdings) and Vodafone’s subsidiary in SA are gearing up to defend their proposed merger at the Competition Tribunal after the Competition Commission threw a spanner in the works earlier in 2023, recommending that the project “be prohibited”. If approved by the tribunal, which has the final say on antitrust-related matters, the merger will create one of SA’s largest fibre providers.
On Wednesday, the two groups said they had agreed to extend the longstop date of the transaction to November 29 2024. This is because the particulars of the transaction are due to be heard by the Competition Tribunal in mid-2024 and the subsequent ruling will be provided within a period yet to be determined.
According to LexisNexis, the longstop date refers to when the conditions must be satisfied (or waived) for completion to take place, so as to impose ultimate certainty about completion of a transaction.
The deal involves CIVH fibre units Vumatel and Dark Fibre Africa (DFA), which were folded into a new holding company, Maziv. Vodacom aims to take a 30% stake in Maziv, worth an estimated R13bn, with the option of raising that to 40%. The transaction, announced in November 2021, has already received approval from SA’s telecom regulator Icasa.
Vodacom said the option to increase its stake in Maziv is exercisable within six weeks of fulfilment of the last conditions precedent.
The companies also said no amendments have been made to the mechanism to determine the valuation of Maziv. This will be aligned to be the same as the transaction share price at a later stage.
Vodacom boss Shameel Joosub recently told Business Day that achieving cost efficiencies is one of the reasons Vodacom is focused on getting its fibre merger with CIVH over the line.
One of the ways that a telecoms operator can save expenses is by sharing costs with competitors, Joosub said
SA’s biggest mobile phone operator reported a decline in interim operating profit as it felt the effect of its start-up losses in Ethiopia in particular. The company, valued at about R223.6bn on the JSE, said total group revenue grew 4.7% on a normalised basis, which presents like-for-like comparisons, and group service revenue grew 4.1%.
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