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[South Africa] CIVH and Maziv respond to regulator’s ruling to block Vodacom-Maziv merger


Community Investment Ventures Holdings (CIVH) and Maziv have responded to recommendations by the South African Competition Commission to block the proposed Vodacom-Maziv merger.

In a statement, CIVH and Maziv say the Commission’s recommendation does not mark the end of the merger process. Consequently, the two say they will approach the Competition Tribunal to present information and make their case for the merger’s approval.

‘’The parties will now approach the Competition Tribunal to present evidence and argue for approval of the merger. CIVH remains committed to the transaction.’’ the statement reads.

‘’We firmly believe that the transaction will deliver substantial benefits to both the South African consumer and the economy. ‘’

The Competition Commission had earlier in recommended against Vodacom and CIVH merging their fibre networks noting that the ‘’transaction is likely to substantially prevent or lessen competition in several markets’’

The deal would have seen Vodacom and CIVH merge their networks into a new entity, referred to as Maziv. If the deal went through, Vodacom would own a 30% stake in Maziv in a R13.2-billion purchase deal.

CIVH and Maziv say this investment would have held a particular significance as a considerable proportion will be focussed on developing new fibre infrastructure at a time when attracting capital investment is particularly challenging.

‘’The transaction will be hugely beneficial to the market in that Vodacom fibre assets will, as a result of the transaction, become commercially available on an open access, transparent and non-discriminatory basis. In addition, the investment will enable Maziv to extend fibre infrastructure to an estimated 1 million new households in lower income areas, create up to 10 000 new jobs, commit at least R10 billion to capital expenditure, and facilitate the creation of small to medium enterprises through a fund formed specifically for this purpose with R300 million of committed capital.’’ the statement read.

During the Commission’s investigation which lasted more than 18 months, both merger parties committed to extensive and robust engagement with the Commission.

‘’We believe that all concerns raised by the Commission during this process can be adequately addressed by a range of conditions and commitments proposed by the parties.’’

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Nixon Kanali

Tech journalist based in Nairobi. I track and report on tech and African startups. Founder and Editor of TechTrends Media. Nixon is also the East African tech editor for Africa Business Communities. Send tips to nkanali@techtrendske.co.ke.

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