The Competition Commission told Parliament this week it has prioritised the acquisition of Cell C during the COVID-19 pandemic.
Competition Commission Commissioner Tembinkosi Bonakele told the portfolio committee on Trade and Industry they have been working on mergers of firms in distress.
One of the prominent merger cases is related to Cell C, which Bonakele said has been in trouble for a while now.
“We have a merger before us that we are finalising that should see Cell C being rescued and jobs being saved,” said Bonakele.
Further details about the Cell C acquisition or merger have not been released.
Cell C’s Chief Legal Officer Zahir Williams confirmed there is an application before the Competition Commission to approve a transaction to recapitalise the company.
“As it is a matter before a regulator and a decision has not yet been made, we cannot comment. Cell C will update the market once a recapitalisation transaction has been successfully concluded,” Williams said.
No Telkom offer on the table
Telkom said in 2019 that it was in discussions with Cell C to acquire the embattled mobile network.
“The potential acquisition will be subject to Cell C completing a financial restructuring to ensure that its gearing levels are reduced to a sustainable level as specified by Telkom and commercial contractual relationships are renegotiated to terms acceptable to Telkom,” Telkom said at the time.
This was the third time that Telkom had attempted to acquire Cell C. Cell C previously chose to recapitalise through Blue Label Telecoms – which now has a 45% stake in Cell C.
In late November 2019, however, Telkom announced its offer to acquire Cell C was rejected.
Telkom reiterated in a SENS statement today that there is currently no Telkom offer on the table to acquire Cell C.
Competition Commission presentation
The slide below comes from the Competition Commission’s joint briefing to the Portfolio Committee on Trade and Industry and Select Committee on Economic Development, Small Business Development, Tourism, Employment and Labour.