Vodacom, Vumatel R13-billion deal will face 18 days of Competition Tribunal hearings
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The Competition Tribunal has announced that it will hear submissions relating to Vodacom’s proposed acquisition of a stake in Maziv for 18 days.
Maziv is a subsidiary of the Remgro-owned Community Investment Ventures Holdings (CIVH). It holds the assets of Vumatel and Dark Fibre Africa.
The proposed transaction involves Vodacom taking a 30% stake in Maziv in exchange for at least R9 billion in cash and fibre assets valued at R4.2 billion.
The cash consideration includes a fixed R6 billion, with a variable portion depending on Maziv’s valuation when the deal goes through.
Vodacom’s fibre assets that would be added to Maziv’s stable include its residential, business, and tower fibre infrastructure. The deal excludes Vodacom’s long-distance network.
Both companies have assured that Vodacom’s fibre network would immediately become open access, adopting the same wholesale model as Vumatel and DFA.
The Competition Tribunal said it would hear submissions from the Competition Commission, Vodacom, Maziv, the Communication Workers’ Union, MTN, and Rain.
It will also hear expert economic evidence.
The dates for the hearing are as follows:
- 20–24 May 2024
- 27–28 May 2024
- 30–31 May 2024
- 3–4 June 2024
- 10–14 June 2024
- 18–19 July 2024
While the deal is only for 30% of Maziv, with the option of increasing it to 40%, Vodacom’s share will give it joint control of the company.
Remgro strategic investments head Pieter Uys previously told MyBroadband that the co-controlling stake was merely to protect Vodacom against Maziv making drastic strategic changes without its input.
Uys also said Remgro was only looking for an investor for Maziv to help speed up its fibre rollout to underserved areas like Alexandra.
He said they had initially gone to international investors, but they walked away from negotiations when the Covid-19 pandemic hit (this deal was initially submitted to the Competition Commission at the end of 2021).
Uys explained that while Vumatel could continue deploying infrastructure without the additional investment, a national rollout would take ten years to complete.
With Vodacom’s investment, they could reduce that timeframe to three years.
This is because CIVH’s debt already stood at around R20.5 billion — most of which belonged to Vumatel.
During Remgro’s March interim results, the company reported that CIVH’s earnings had nosedived by 96.7% — from R184 million to R6 million.
This was mainly due to interest rate hikes that increased the company’s debt repayments.
To arrest the earnings decline, CIVH had to cut expenditure, which means funding for new fibre builds — including its Alexandra township fibre project — has all but dried up.
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