The Competition Commission (CompCom) has approved, with conditions, the proposed R6.75 billion deal whereby TowerCo intends to acquire tower and mast business Swiftnet from Telkom.
Swiftnet, a key player in the South African market, has extensive masts and towers infrastructure, with approximately 6 200 installations and leasing co-location space to major mobile network operators.
By disposing of Swiftnet, Telkom said it was looking to unlock shareholder value and focus on its core business operations.
Earlier this year, the majority of Telkom shareholders voted in favour of the proposed transaction, which is still to get the final nod from the Competition Tribunal.
In a statement, the regulator says it is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market.
The primary acquiring firm, TowerCo, was established for the purposes of the proposed transaction, says the competition watchdog.
TowerCo is jointly controlled by the Actis Ohio Fund and Royal Bafokeng Infrastructure Investments.
The Actis Group is a global investor with investments in energy infrastructure, long life infrastructure, digital infrastructure, real estate and private equity
In South Africa, Actis Group invests in the food retail, education, fibre and internet services sectors.
The Royal Bafokeng Group is primarily an investment holding company with minority interests held in various investments across diverse sectors and geographies. These include infrastructure, property, financial services, telecoms, pharmaceuticals, resources and industrial sectors.
The primary target firm, Swiftnet, is wholly-owned and controlled by Telkom, a JSE-listed state-owned company, says the CompCom.
It adds that Swiftnet’s core business includes leasing space on its owned mast and tower-related infrastructure to customers, including mobile network operators, enabling such customers to deliver connectivity to their respective subscribers or customers and/or operate wireless networks.
Swiftnet also provides wireless in-building solutions which allow its customers to provide mobile network connectivity within shopping centres, buildings and other public infrastructure and offices in approximately 28 locations across the country.
“To address public interest concerns, the merger parties have made procurement commitments to firms that are either small/medium enterprises or that are owned by historically disadvantaged persons for a period of five years from the merger implementation date,” the regulator notes.
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