Vodafone set to take over Vodacom
UK-BASED cellphone giant Vodafone can expect to meet little resistance in its bid to finalise the acquisition of Vodacom next week.
Analysts agree that the company won’t have much opposition to the deal, which was officially announced about three months ago.
Next week’s competition tribunal hearing over the deal is the final hurdle before Vodafone takes control of the biggest cellphone operator in South Africa.
On Monday, the Competition Commission gave the deal the thumbs up, saying it had “recommended the approval of the proposed merger between Vodafone and Vodacom and has referred the transaction to the Competition Tribunal for approval”.
The deal, worth R22.5-billion, will see Vodafone taking a 15percent stake from Telkom’s 50percent.
This will put Vodafone into a controlling position with 65 percent, rather than the previous situation where it had to consult state telecoms provider Telkom on strategic decision making.
The deal also does away with a restrictive shareholders’ agreement that prevented Vodacom from expanding beyond sub-Saharan Africa.
Nandi Mokoena, manager of strategy and stakeholder relations at the Competition Commission, said: “The commission contacted the merging parties’ competitors and customers to solicit their views regarding the proposed transaction.
“No significant competition concerns were raised by either the customers or competitors of the merging parties.”
Heather Irvine, competition director at legal firm Deneys Reitz, said the deal would go through easily, based on similar cases that were approved by the tribunal in the past. “It’s not a traditional merger where the parties are new to each other. It’s a situation where [Vodafone] already has an interest in Vodacom.
“When Naspers was buying the remaining stake in Supersport, the matter went through without a problem. Typically, this type of transaction doesn’t pose any competition risk.” She also said there would be an increase in competition because Vodacom would now be a competitor to Telkom, and Vodafone would not take up any more market share of the South African mobile industry.
Humbulani Rambau, ICT market analyst at Africa Analysis, said the recent Electronic Communication Network Services Licences that were recently awarded to more than 500 companies would bring additional competition to the industry.
He said:“There’s going to be fierce competition as a result of the licences, but also competition for MTN and Zain [a Kuwaiti tele-coms company] continentally, now that Vodacom will be able to expand into Africa.”
Vodacom-Vodafone deal – give your views
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