South Africa’s Competition Commission has recommended the approval of leading cellco Vodacom (JSE:VOD)’s 100% acquisition of fibre operator Neotel, with conditions.
The Comp Com said it now advises that the Competition Tribunal also pass the R7bn…
South Africa’s Competition Commission has recommended the approval of leading cellco Vodacom (JSE:VOD)’s 100% acquisition of fibre operator Neotel, with conditions.
The Comp Com said it now advises that the Competition Tribunal also pass the R7bn (US$571m) deal, which was agreed in May 2014.
“This merger will change the South African mobile network and fixed line industry significantly,” said Commissioner Tembinkosi Bonakele.
Structural conditions include Vodacom not using Neotel’s spectrum for two years, and committing to a five-year, R10bn investment in fixed-line network, data and connectivity infrastructure. Public interest conditions include increasing the value of Black Economic Empowerment (BEE) held shares by R1.4bn – proportional to the current BEE holding in Neotel – and not dismissing any of Neotel’s workforce as a result of the merger.
Neotel, the country’s number two fixed-line operator, is owned by India’s Tata Communications (68.5%), BEE Nexus Connexion (19%), and Telecom Namibia’s CommuniTel (12.5%).