The Competition Tribunal recently approved the proposed merger between Business Connexion (BCX) and Telkom, with the imposition of conditions.
BCX is one of the largest ICT services providers listed on the JSE: in terms of turnover, total assets, and staff complement.
Telkom is acquiring the entire issued share capital of BCX, which will then delist from the JSE.
BCX has strong capabilities in IT Infrastructure – including data centres, cloud services, and application development – which will allow Telkom to expand its existing offerings and provide scale in IT services.
Final approval will now be sought from the Takeover Regulations Panel and the JSE. The transaction is expected to be concluded by 25 August.
Letter from the Telkom CEO to staff
Telkom CEO Sipho Maseko has told staff that the acquisition of BCX will help them to grow beyond their core business of connectivity, and further expand into ICT services.
Here is what Maseko told staff.
Competition Tribunal approves BCX transaction
In recent months, our proposed acquisition of Business Connexion (BCX) has been under review by competition authorities. I am very pleased to inform you that the Competition Tribunal today approved Telkom’s acquisition of BCX.
Following the Competition Tribunal’s decision, we will now seek final approval from the Takeover Regulations Panel and the JSE. We expect the transaction to be completed by the end of August.
As you may know, BCX is one of the largest ICT service providers on the JSE. The company employs more than 6,700 people in offices across Africa, the United Kingdom and Dubai, with revenue in excess of R7 billion per annum.
This deal has been long in the making, and I am delighted that we are able to proceed with an acquisition that brings with it substantial benefits to both Telkom and BCX customers. Through this transaction we will grow beyond our core business of connectivity by further expanding into ICT services. At the same time, we’ll be reinforcing our connectivity offering and enhancing Telkom’s convergence strategy.
At Telkom we are committed to putting the customer at the centre of all we do. This deal will improve the customer value propositions of both companies. Together, we’ll provide integrated end-to-end ICT solutions and a more global and competitive offering, particularly on the African continent.
Our commitment to Business Connexion is for the long-term. At Telkom, we believe we have a large role to play in social development and achieving ongoing transformation goals. Robust and scalable ICT services will remain a vital enabler for economic growth.
I would like to extend my heartfelt thanks to Brian Armstrong, Althon Beukes and the M&A and Regulatory teams, who have worked tirelessly to deliver this successful outcome.
We will keep you updated as the legal process becomes effective and the transaction progresses.