Altech-NamITech merger approved

By Iain Scott, ITWeb group consulting editor

Johannesburg, 06 Feb 2004

The Competition Tribunal has given the go-ahead for Altech`s R500 million acquisition of NamITech, subject to certain conditions.

The Competition Commission, which is one tier below the tribunal, originally rejected the merger, but decided to recommend it to the tribunal once Altech made some concessions.

The tribunal has accepted the concessions and approved the deal on condition that Altech dispose of its Africard division, with the exception of the personalisation bureau, and that Altech no longer be an exclusive distributor of Datacard personalisation equipment spares or solutions.

Both Altech and seller Nampak have welcomed the announcement.

Altech CEO Craig Venter says while it is not easy to sell a profitable business, this was an important part of gaining the tribunal`s approval.

"Altech has already secured a purchaser, approved by the tribunal, for the Africard business, which will allow it to continue as a going concern," he says.

Although Venter did not name the company, JSE-listed Labat Africa said recently that it was in talks with Altech with regard to buying Africard.

It said at the time that the talks hinged on whether the Competition Tribunal approved the NamITech deal.

Venter says the NamITech purchase will require Altech to spend about R500 million to buy an initial 85% of NamITech before reintroducing Pamodzi as a 28% shareholder through a black economic empowerment funding arrangement.

The NamITech acquisition will give Altech`s IT division a turnover in excess of R1 billion.