Big break for Vodacom’s R13 billion fibre deal
The Competition Appeal Court has reportedly approved Vodacom’s acquisition of roughly 30% in Vumatel-owner Maziv.
As reported by MyBroadband, the Competition Appeals Court approved the deal on Thursday (14 August).
Vodacom’s deal to acquire Maziv dates back to 2021, and the ownership structure of the deal has become increasingly complex amid major legislative battles.
In 2021, Vodacom announced a deal to buy a stake in Community Investment Ventures Holdings (CIVH), which owns Vumatel and Dark Fibre Africa (DFA).
The deal has taken years to reach an end as the telcos battled through South Africa’s competition authorities.
The Competition Commission recommended in August 2023 that the deal be prohibited, with the Competition Tribunal blocking it a year later.
Vodacom and Remgro, a majority owner of CIVH, then approached the Competition Appeal Court to challenge the original decision, with support from Trade Minister Parks Tau.
Sources told MyBroadband that the CAC ruled in favour of the deal.
Although approval is still needed from Icasa for the deal to go through, the regulator had already previously approved the ownership of the DFA’s network and service licences to Maziv.
This puts the deal in good stead for final approval.
To gain support for the deal from the competition authorities, Vodacom and Maziv restructured the acquisition to address concerns raised by the Competition Commission.
The commission later withdrew opposition to the deal, and, in a surprising twist, said it would support it at the Appeal Court.
Under the terms of the new deal, Vodacom will acquire up around 30% of the ordinary shares of Maziv, which has specifically been created to facilitate the transaction.
Vodacom will add high-speed fibre-to-home, fibre-to-the-business, and business-to-business transmission access fibre network infrastructure valued at R4.9 billion for new shares in Maziv.
It will also subscribe for new shares in Maziv for R6.1 billion in cash and buy additional Maziv shares from CIVH, estimated to be R2.5 billion, enough to increase its shareholding to 30%.
Vodacom also has the option to acquire an additional 4.95% of the group’s shares. The final value of the deal will be circa R13 billion.
“The option exercise price will be based upon a fair market valuation conducted by independent banks following closing,” Vodacom said.
“The option will be subject to a minimum valuation broadly in line with the final transaction valuation.”
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