The Competition Commission has recommended the approval of the proposed merger between the Vodafone Group and Vodacom Group, and has referred the transaction to the Competition Tribunal for approval.
Vodacom is jointly controlled by Telkom SA and Vodafone on a 50-50 basis.
In terms of the proposed transaction, Vodafone will acquire a further 15% of the issued share capital in Vodacom from Telkom. Vodacom will be listed on the JSE and Telkom will unbundle its remaining 35% shares in Vodacom to its own shareholders.
On completion of the proposed transaction, Vodafone will hold 65% of the issued share capital of Vodacom. The remaining shares of Vodacom will be publicly held. Vodafone will exercise sole control over Vodacom post-merger.
According to the Competition Commission, its investigation of the proposed merger found Vodafone does not compete with Vodacom in any of the product markets in SA. The commission also believes the vertical integration between the parties is unlikely to result in any substantial prevention or lessening of competition.
The commission says it contacted the merging parties' competitors and customers to solicit their views regarding the proposed transaction. No significant competition concerns were raised by either the customers or competitors of the merging parties.
The commission also concluded there were no significant public interest issues that warranted a prohibition or conditional approval of this transaction.
The tribunal will hold public hearings into the matter on 25 February at 10am.
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