Old Mutual fund gets green light to acquire solar firm

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 13 Feb 2023

The Competition Commission (CompCom) has recommended the Competition Tribunal approve, with conditions, the proposed transaction whereby Old Mutual fund IDEAS intends to acquire SolarAfrica.

In a statement, the competition watchdog says the primary acquiring firm is IDEAS, a private infrastructure fund ultimately controlled by Old Mutual.

Through Old Mutual, the acquiring group is active in the supply of energy infrastructure, in particular, solar photovoltaic (PV).

SolarAfrica Energy is wholly-owned by SolarAfrica, which is ultimately controlled by a trust.

The deal comes as more South African businesses and households are turning to alternative energy solutions, such as solar, in a bid to mitigate against the challenges brought by load-shedding.

As the power shortages continue, last week, during his State of the Nation Address, president Cyril Ramaphosa declared the crisis a national disaster.

The president also recently announced households and businesses will soon be allowed to sell surplus electricity from rooftop solar panels into the national grid.

Yesterday, embattled power utility Eskom, which provides over 90% of the country’s electricity, said in a statement stage four load-shedding will continue to be implemented at 16:00 to 05:00 daily, while stage three load-shedding will be implemented at 05:00 to 16:00 daily until further notice.

According to the CompCom, SolarAfrica Energy controls a number of subsidiaries.

It explains the target group is a supplier of solar PV to the commercial and industrial sectors. SolarAfrica Energy also provides battery energy storage, wheeling and hybrid power solutions as part of its product offering to commercial and industrial customers.

The commission found the merger raises information exchange concerns, as IDEAS has the ability to appoint directors at the target group’s competitors (ie, other solar PV suppliers).

The commission has recommended the tribunal approves this merger, subject to conditions that mitigate the exchange of any competitively-sensitive information through director appointments.

The watchdog further found the proposed transaction does not raise any other public interest concerns.