The South African Minister of Trade, Industry, and Competition, Parks Tau, disclosed that taxpayers’ cost for filing an intention to appeal the Competition Tribunal’s rejection of the Vodacom-Maziv deal was US$60307.16.
In response to a question from EFF MP Ntombovuyo Veronica Mente-Nkuna in Parliament, Tau noted that Vodacom and Maziv had agreed to various significant public interest conditions aimed at enhancing investments and improving fibre and mobile connectivity across South Africa.
In November 2021, Vodacom announced its acquisition of a stake in the fibre assets of Community Investment Ventures Holdings (CIVH), the parent company of Vumatel and Dark Fibre Africa (DFA). CIVH is primarily owned by Remgro, which holds a 57% stake in the entity.
The agreement between Vodacom and CIVH involves pooling their fibre networks, resulting in Vodacom holding a 30% to 40% stake in the newly formed entity, Maziv, which was created to manage these fibre assets and facilitate the transaction. Vodacom proposed a deal valued at a minimum of US$720 million for a 30% equity share, composed of US$327 million in cash, US$229 million in Vodacom’s fibre assets, and an additional purchase option linked to CIVH’s valuation at the time of the transaction, approximated to be around R3 billion. Additionally, Vodacom has the option to increase its stake to 40%.
The deal awaited regulatory approval for an extended period, during which the Independent Communications Authority of South Africa eventually granted authorization in November 2022, a full year after the announcement. However, the competition authorities took even longer, engaging in 20 months of extensive negotiations that imposed several conditions on the deal, ultimately resulting in its rejection by the Competition Commission in August 2023.
The Tribunal conducted public hearings for several weeks, concluding in late September. A month later, it announced its decision to block the transaction. The Tribunal expressed concerns over Vodacom’s being South Africa’s largest mobile network provider and Maziv’s being a major player in the fibre infrastructure sector. The Tribunal has yet to release a comprehensive explanation of its ruling.
Under the Competition Act, the Tribunal must issue a rationale for its decisions within 20 business days; however, this case remains unresolved four months later.
In his recent parliamentary remarks, Tau affirmed his participation in the merger proceedings based on public interest considerations, emphasising that the conditions set by Vodacom and Maziv align with South Africa’s goals for industrialisation, investment, and economic growth. His department indicated that once the Tribunal’s reasoning is available, the Minister will evaluate whether to proceed with or withdraw the appeal, considering the Tribunal’s prohibitive rationale against the positive public interest outcomes presented by Vodacom and Maziv.
