The R2.67 billion merger deal between Telkom and ICT firm Business Connexion (BCX) has received approval from the Competition Commission.
The deal is still awaiting approval from the Independent Communications Authority of South Africa (Icasa).
Telkom announced a year ago (May 2014) that it had entered into an agreement to acquire the listed ICT group in a R2.7 billion cash offer funded from its own cash resources.
The purchase includes the entire issued ordinary share capital of BCX, but excludes the BCX ordinary shares held by Business Connexion as treasury shares.
Telkom would pay to the ordinary shareholders a cash consideration of R6.60 per ordinary scheme share, and will terminate BCX’s listing on the main board of the JSE once the deal gets final approval.
“Upon receipt of the above approvals, final approval of the Proposed Transaction will be sought from the Takeover Regulation Panel,” Telkom said in a statement at the end of April.
“The Commission has recommended to the Competition Tribunal (Tribunal) that the large merger whereby Telkom SA SOC Limited (Telkom) intends to acquire Business Connexion Group Limited (BCX) be approved, with conditions,” the commission said.
“Post-merger, BCX will become a wholly owned subsidiary of Telkom, and will delist from the Johannesburg Stock Exchange (JSE).”
The Competition Commission has made the recommendation subject to the imposition of certain conditions, to be met by both parties.
Telkom and BCX welcomed the recommendation by the Competition Commission. “Telkom and BCX remain committed to the proposed transaction and will engage and work with the necessary regulatory bodies as required,” the group said in a statement on Thursday (14 May).
“We believe the proposed acquisition will assist Telkom with its strategy to grow beyond its core business of connectivity by expanding into ICT services. This will enable our business to further enhance and grow its existing offerings, while at the same time providing scale in IT services,” said Telkom CEO, Sipho Maseko.