South Africa’s antitrust regulator urged the Competition Tribunal to block Vodacom Group Ltd.’s deal to buy Remgro Ltd.’s fiber businesses, the watchdog said on Tuesday.
(Bloomberg) — South Africa’s antitrust regulator urged the Competition Tribunal to block Vodacom Group Ltd.’s deal to buy Remgro Ltd.’s fiber businesses, the watchdog said on Tuesday.
South Africa’s Competition Commission, which investigates deals for any antitrust issues, rejected Vodacom’s acquisition of a minority stake in Remgro’s unit. The final decision on the transaction valued at 13.2 billion rand ($696 million) has been referred to the country’s Competition Tribunal.
“The Commission is of the view that the proposed transaction is likely to substantially prevent or lessen competition in several markets and that the conditions offered do not fully address the resultant harm to competition,” the regulator said in a statement. “Further, the public interest commitments provided by the merger parties do not outweigh the competition concerns.”
This is the second big announcement coming from South Africa’s watchdog in as many days, after the body questioned the dominance of big tech firms operating in the country including Alphabet Inc.-owned Google.
African mobile companies have been investing in infrastructure as they seek to monetize services offered on their networks, towers and data centers. Wireless carriers expect the continent’s fast-growing, young and increasingly tech-savvy population will turn to their smart-phones to access a wide range of services from entertainment to banking and insurance.
Still, South African operators are battling with operating challenges including an ongoing power crisis, unemployment and vandalism of its infrastructure. While, the country has a large number of fiber operators, consolidation of the sector would assist in dealing with certain market dynamics.
Vodacom, the largest wireless carrier in South Africa, said though it is disappointed by the decision “it is important to note that the Competition Commission’s recommendation is not the end of the process.”
The next step will be for the transaction to be presented to the Competition Tribunal, it said
The operator walked away from a large fiber acquisition with Neotel several years ago, after it faced a number of regulatory battles and legal opposition to the deal by competitors.
The Johannesburg-based firm recently also expanded its operations into Egypt and Ethiopia.
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