Green light for Digital Realty’s bid to acquire Teraco stake
The Competition Tribunal has conditionally approved the large merger wherein Digital Titan is indirectly purchasing shares in TDE Investments, which will give it a shareholding in Teraco Data Environments and its subsidiaries.
Teraco, Africa’s carrier-neutral data centre and interconnection solutions provider, in January announced Digital Titan’s parent, Digital Realty, had entered into a definitive agreement to acquire a majority stake in Teraco from a consortium of investors, including Berkshire Partners and Permira.
Following the announcement, in April the Competition Commission recommended the Competition Tribunal approve the proposed transaction with conditions.
In a statement yesterday, the Competition Tribunal says the primary acquiring firm, Digital Titan, is a newly-established company created for the purpose of the proposed transaction.
Incorporated in South Africa, Digital Titan does not control any firm or conduct any activities, says the competition watchdog.
It notes Digital Titan is ultimately controlled by Digital Realty Trust, a corporation registered in the US and as a Real Estate Investment Trust for US federal tax purposes.
“Digital Realty acquires, develops and operates data centres. It does not have any data centres in South Africa and is not active in the country. As an international firm, it is not owned or controlled by any HDPs [historically disadvantaged persons] as defined in section 3(2) of the Competition Act,” says the tribunal.
“The primary target firm, TDE, is a South African company. Through its subsidiary, Teraco, it is a provider of data centre services. TDE is not owned or controlled by any HDPs. Following the implementation of the proposed transaction, Digital Realty will acquire control over TDE.”
Based in Johannesburg and established in 2008, Teraco is Africa’s largest data centre services provider.
The acquisition comes as Teraco has been making massive investments in the South African data centre market, which is witnessing significant growth.
At the SA Investment Conference 2020, Teraco committed to invest over R4 billion in the South African data centre space.
The company offers vendor-neutral colocation and other related services in data centres. The company operates seven facilities with 75 megawatts of critical power load, serving more than 600 clients, including global internet companies, across six core ecosystems – connectivity providers, managed service providers, cloud, content, enterprise and financial services.