The Competition Commission (CompCom) has recommended the Competition Tribunal approve the proposed transaction, whereby Stanlib intends to acquire Africa Data Centres (ADC), without conditions.
Data centre operator ADC is a business unit of Pan-African technology group Cassava Technologies.
In a statement issued yesterday, the competition watchdog says the primary acquiring firm is the Stanlib Infrastructure Fund II (Stanlib Fund II), an investment vehicle that focuses on renewable energy, digital infrastructure and logistics.
The Stanlib Fund II, the firms it controls and its controllers are collectively referred to as the ‘acquiring group’, it notes.
The CompCom explains that the primary target firm is Cassava ADC. “Cassava ADC is controlled by ADC Holdings, a firm incorporated in England and Wales. Pursuant to the merger, Cassava ADC will control ADC Dev and ADC Sam. Cassava ADC, ADC Dev and ADC Sam are collectively referred to as the ‘target group’.”
The target group, it adds, conducts private data centre operations in SA, which include the provision of data capacity and security services to enterprise customers across the country and, in certain instances, to clients elsewhere on the African continent through open-access arrangements.
The CompCom further highlights that the target group provides data centre services in SA, encompassing infrastructure for hosting, data processing and related activities. “These services include, without limitation, co-location, hardware provisioning, network connectivity and onsite technical support, which allow businesses to securely and reliably operate their IT infrastructure off-site.”
The commission found the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets, adding that the proposed transaction does not raise significant public interest concerns.
The proposal follows a strategic partnership between Stanlib Infrastructure Investments and the Cassava Technologies-owned company that was announcedlast year.
Africa’s data centre market is projected to reach $4.36 billion by 2031, with the South African market considered a ‘sweet spot’, given its favourable position on the African continent.
South Africa is the largest data centre market on the continent, as hyperscalers and data centre operators continue to establish cloud regions, according to Grand View Research.
The country’s geographical position makes it a strategic hub for regional and international connectivity.
Digital Realty-owned Teraco, Vantage Data Centres, Open Access Data Centres and Equinix have all expanded their data centre footprint in SA, while hyperscalers Amazon Web Services, Google and Microsoft Azure have also built local data centre facilities.
ADC operates a network of hyperscale and edge data centres across Southern, East and West Africa, providing carrier- and cloud-neutral infrastructure for co-location, interconnection and cloud on-ramps.
The company operates three South African facilities, in Midrand (JHB1), Centurion (JHB2) and Cape Town (CPT1). It was also reported that a fourth facility was under construction in Cape Town (CPT2) that would go live in the short- to medium-term. Across its South African facilities, the company has 30MW of capacity in total and is building an extra 20MW.
At a regional level, the company announced in 2021 its plans to open two new facilities in Nairobi, Kenya.
Furthermore, ADC has received sizeable investments to expand services over the years.
In June 2024, it secured R2 billion in funding to increase its data centre capacity in SA. The funding was facilitated through a bespoke financing solution arranged by Rand Merchant Bank. The financing would enable ADC to accelerate and expand its hyperscale data centre capacity by an additional 20MW, furthering its position as a leading player in the African data centre space, said the company at the time.
In November 2021, the firm announced it had secured an investment of almost R4 billion to expand its two Johannesburg-based data centres from 30MW to 100MW of IT load.
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