Vodacom was set to buy fibre company Maziv from Remgro for a massive R6 billion for a 30% stake in return, alongside an investment in infrastructure worth R4.2bn aimed at expanding access to fibre broadband for millions of South Africans. File image.
Nicola Mawson
The Department of Trade, Industry and Competition (the dtic) Minister Parks Tau is set to appeal the Competition Tribunal’s prohibition of a multi-billion rand deal to create a massive fibre company on the grounds that it would have been in the public interest to allow it.
Vodacom was set to buy fibre company Maziv from Remgro for a massive R6 billion for a 30% stake in return, alongside an investment in infrastructure worth R4.2bn aimed at expanding access to fibre broadband for millions of South Africans.
In a statement, dtic said the Minister’s pending appeal said there were substantial public interest commitments that would have significantly boosted investment, created jobs and resulted in the growth of fibre and mobile connectivity in communities that lack adequate communication infrastructure.
As part of the scuppered deal, the merging parties had pledged an investment of about R10bn over five years, mostly in low-income areas. It would also have run fibre past a million homes during the same period, while also creating 10 000 jobs.
In the dtic’s statement, it said it lodged a notice of appeal on Wednesday at the Competition Appeal Court. Tau stated that he is awaiting the publication of detailed reasons of the Tribunal’s decision in prohibiting the merger before assessing next steps in line with the Competition Act.
“Given that the reasons for the prohibition have not been published as yet, the Minister considered it prudent to formally note an appeal to the Tribunal’s decision in order to comply with the statutory timeline for appeal in terms of sections,” the statement read.
Speaking with Business Report previously, Maziv’s CEO Dietlof Mare said, without the essential support from Vodacom, the company cannot pay down debt and raise cash.
The Tribunal has yet to provide reasons for blocking the deal, and Vodacom is awaiting the paperwork before deciding whether to appeal.
BUSINESS REPORT