JSE-listed Remgro is positive South Africa’s competition authorities will give the prosed merger deal between its Community Investment Ventures Holdings (CIVH) and Vodacom the green light.
This emerged when Remgro today announced its financial results for the six months ended 31 December.
In a statement, the company says while the 2023 calendar year saw the completion of transformative corporate actions for Remgro, the group remains intensely focused on achieving a favourable outcome on the proposed transaction between Vodacom and CIVH.
Commenting on the potential deal, Remgro CEO, Jannie Durand says: “We, together with the CIVH and Vodacom management teams, fundamentally believe in the value of this transaction; the benefits for all stakeholders that stand to be unlocked through its successful completion.
“These benefits include the very real and tangible positive social impact relating to critical issues such as the democratisation of the internet in rural and lower income areas by means of providing cheaper fibre to the greater South Africa; the potential for job creation, and economic growth for our country.”
In August last year, the Competition Commission recommended the R10 billion merger be prohibited.
This, after the competition watchdog found the proposed deal will likely prevent or lessen competition in several markets and that the conditions offered by the merging parties do not fully address the resultant harm to competition.
The commission then referred the matter to the Competition Tribunal, an independent adjudicative body and is one of three independent authorities established in terms of the Competition Act.
Maziv was created last year by CIVH after it folded its fibre network operators – Vumatel and Dark Fibre Africa – into one giant fibre infrastructure company.
Under the deal, Vodacom is looking to acquire a 30% stake in the newly-created Maziv, with an option to increase the stake by 10%.
According to Vodacom, the proposed transaction will significantly propel South Africa’s social development and would be highly beneficial for the country, the economy and lower income households on a number of fronts, including:
- Maziv committing to invest capex of at least R10 billion over a five-year period, including the commitment to pass at least one million new homes in lower income areas, such as Alexandra, with fibre infrastructure over a five-year period.
- A commitment to create up to 10 000 new jobs, while at the same time providing job security and enhanced benefits for current employees potentially impacted by the transaction.
- Prioritising SMME development by establishing a new enterprise and supplier development fund of R300 million over three years, focused on increasing the level of localisation across the value chain.
- The investment by Vodacom in excess of R13 billion into South Africa through this transaction would come at a time when attracting capital investment is particularly challenging.
Vodacom notes that this level of investment cannot be made by Maziv alone, and is over and above Vodacom’s pledge at the recent SA Investment Conference to invest R60 billion over five years.
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