The Competition Commission (CompCom) has recommended the Competition Tribunal approve MTN’s proposed acquisition of tower operator IHS, with conditions.
The acquisition, facilitated through wholly-owned MTN firm Sub-Merger Co, will see the mobile telephony group increase its shareholding in IHS to 100%. MTN holds approximately 85.2 million (26%) of IHS shares.
In a statement, the CompCom says it found the proposed transaction raises competition and public interest concerns.
As a result, it has recommended conditions to protect jobs and historically-disadvantaged persons (HDPs) ownership, preserve existing customer rights, ensure renewals of all existing lease agreements are negotiated fairly and that no customer is disadvantaged relative to MTN SA.
Further, the conditions look to ensure fair, equitable and non-discriminatory access to infrastructure by mobile network operators (MNOs) and non-MNO customers of IHS and prevent preferential treatment of MTN SA, says the commission.
“The conditions also safeguard competitively-sensitive customer information, support small, medium and micro enterprise and HDP participation in new tower sites, and maintain IHS as an operationally independent entity.”
Nompilo Morafo, chief sustainability and corporate affairs officer at MTN Group, comments: “IHS and MTN are pleased the proposed acquisition of IHS by MTN has been referred by the Competition Commission to the Competition Tribunal, as is customary for a transaction of this nature.
“The parties believe the transaction will be beneficial to the entire industry and, accordingly, have offered certain conditions which they consider fully address any competition and public interest concerns.”
According to Morafo, the procedural development is an important milestone following approvals granted in other jurisdictions, including the recent approval in principle by the Nigerian Communications Commission and approvals in Zambia.
MTN first announced in February that it had entered into an agreement to acquire the remaining shares in IHS, a move that would give the mobile operator full ownership of one of Africa’s largest independent tower companies.
The deal came after IHS completed the acquisition of over 5 700 MTN towers in South Africa in 2022, in a deal that saw the tower operator company pay R6.4 billion.
After the 2022 deal, IHS owned 70% of MTN SA’s towers business, with the remaining 30% owned by a B-BBEE consortium. Under the deal, IHS provided power management services to MTN SA on approximately 13 000 sites, including the acquisition portfolio.
Earlier this year, MTN said upon the completion of IHS’s announced disposals of its Latin American assets, it intended to acquire 100% of IHS’s remaining business.
The JSE-listed firm has noted the acquisition forms part of its Ambition 2030 strategy, which aims to strengthen the group’s digital infrastructure capabilities and diversify revenue streams.
IHS is one of the world’s largest independenttower companies, with nearly 29 000 towers in Africa serving various mobile network operators in five key MTN markets.
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