TLDR
- South Africa's Competition Tribunal blocks Vodacom's $745 million acquisition of Remgro Ltd.'s fiber businesses, impacting telecom and fiber expansion plans.
- Vodacom to review Tribunal's decision and consider potential steps, potentially appealing to the Competition Appeal Court.
- CEO Shameel Joosub expresses disappointment as the deal included a sizable investment in fiber infrastructure for low-income areas, job creation, and digital access enhancement.
South Africa's Competition Tribunal has blocked Vodacom Group Ltd.'s 13.2 billion-rand ($745 million) acquisition of a stake in Remgro's fiber businesses, dealing a blow to the country's telecom and fiber expansion plans.
Vodacom plans to review the tribunal's reasoning before deciding on potential steps, which may include an appeal to the Competition Appeal Court. Remgro is also weighing its options.
CEO Shameel Joosub expressed disappointment, noting that the deal included a 14 billion-rand investment in fiber infrastructure for low-income areas, creating 10,000 jobs and enhancing digital access. The acquisition would have secured Vodacom a 30% stake in Maziv, with an option to increase to 40%, enabling control over Dark Fibre Africa and Vumatel.
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Key Takeaways
The tribunal's decision delays a strategic move by Vodacom and Remgro to extend fiber infrastructure in underserved areas of South Africa. Telecom operators across Africa are increasingly investing in infrastructure to meet demand from the continent's young, tech-savvy population. Analysts suggest that open-access and pricing solutions may strengthen Vodacom's appeal if the case moves to the Competition Appeal Court, but even if the deal fails, fiber assets like Maziv are expected to remain highly valuable. Vodacom's shares fell by 1.1%, while Remgro's dropped 5.9%, reflecting investor reaction to the regulatory setback.
