Vodacom faces regulatory setback in $790-million Maziv acquisition
Key Points
- Vodacom's $790-million acquisition of a 30% stake in Maziv was rejected by the Competition Tribunal, hindering expansion plans.
- The deal aimed to merge Vumatel and Dark Fibre Africa to enhance Vodacom's position in South Africa's telecom infrastructure.
- CEO Shameel Joosub expressed disappointment but remains optimistic about exploring options for Vodacom’s long-term growth and digital expansion in Africa.
Vodacom Group, the Johannesburg-based telecommunications giant led by South African executive Shameel Joosub, has encountered a significant setback in its expansion strategy after the Competition Tribunal rejected its acquisition of a 30-percent stake in Maziv.
The proposed $790.7-million investment aimed to merge Vumatel and Dark Fibre Africa into a single entity under the Maziv umbrella, but regulators expressed concerns over reduced competition and potential price increases, jeopardizing Vodacom's growth ambitions.
Vodacom's $790 million deal faces obstacles
The R14-billion ($790 million) deal was initially announced in 2021, with Vodacom planning to invest R6 billion ($338.93 million) in cash and contribute fibre assets valued at R4.2 billion ($237.25 million) for the stake in Maziv, which was created by Community Investment Ventures Holdings (CIVH), a subsidiary of Remgro.
This merger aimed to consolidate the assets of Vumatel and Dark Fibre Africa to create a leading player in the country’s telecom infrastructure.
Despite the regulatory roadblock, Vodacom CEO Shameel Joosub remains optimistic about the company’s long-term plans but expressed disappointment about the decision.
“I am deeply surprised and disappointed by the Tribunal’s decision,” Joosub stated. “South Africa urgently needs substantial investments, particularly in digital infrastructure for lower-income areas. Vodacom will explore all available options to address this regulatory challenge.”
Vodacom leads digital expansion in Africa
Vodacom Group, led by CEO Shameel Joosub, serves more than 200 million subscribers across Africa, with strong operations in South Africa, Tanzania, the Democratic Republic of Congo, Mozambique, and Lesotho. The company’s focus on expanding digital infrastructure aims to connect underserved communities across the continent.
Under Joosub’s leadership, who owns a 0.09-percent stake in the company valued at approximately $9.56 million (R175.1 million), Vodacom achieved notable growth, reporting a 26.4-percent rise in revenue to R150.59 billion for the fiscal year ending March 2024.
Although the Competition Tribunal’s decision to block Vodacom’s 30-percent acquisition of Maziv poses a regulatory challenge, it highlights Vodacom’s determination to lead Africa’s fibre and digital markets. Despite this setback, Vodacom remains committed to its strategic goal of expanding connectivity and enhancing its digital footprint across the continent.