SA minister files appeal to unblock Vodacom-Maziv deal

The Minister of South Africa's Department of Trade, Industry and Competition (DTIC) has filed an appeal against the Competition Tribunal's recent decision to block a proposed deal between telecom operator Vodacom and fiber company Maziv.

The appeal document, which Connecting Africa has seen, was filed in the Competition Appeal Court of South Africa on November 26, 2024.

On October 29, 2024, news broke that South Africa's Competition Tribunal had decided to prohibit the planned deal between Vodacom and Maziv.

Vodacom was planning to invest up to R14 billion (US$770 million) into Maziv, the fiber holding company of Vumatel and Dark Fibre Africa (DFA), which is in turn owned by Community Investment Ventures Holdings (CIVH).  

The DTIC oversees the competition regulators in SA and now DTIC Minister Parks Tau is attempting to use legal routes to overturn the decision and allow the merger to proceed.

The Minister is asking for the court to uphold the appeal; approve the large merger subject to the conditions proposed by the merging parties to the Tribunal on September 30, 2024 (or other conditions that the court deems fit); is seeking costs for the appellant including the costs of two counsel; as well as "further and/or alternative relief as the Court deems fit".

Related:SA Competition Tribunal prohibits Vodacom-Maziv deal

South Africa's Minister of Trade, Industry and Competition, Parks Tau. (Source: Jolanda Flubacher for World Economic Forum on Flickr via CC 2.0)

The appeal document also cites a number of respondents including The Competition Commission of South Africa, mobile operators MTN and Rain, The Communication Workers Union, as well as Vodacom and Maziv (which is referenced by its other name Business Venture Investments No 2213 (Pty) Ltd).

The DTIC said that "the grounds upon which the Appellant's appeal is based will be set out in a supplementary Notice of Appeal upon the Tribunal's provision of the reasons for the prohibition of the large merger."

The Tribunal has not yet released its full reasons for blocking the deal but did say that it believed that the transaction would have combined the country's largest mobile operator with one of South Africa's largest fiber infrastructure players.

SA's Competition Commission had also recommended to prohibit the merger, citing concerns that it could substantially prevent or lessen competition in several markets.

The deal was originally announced in November 2021, when Vodacom said it planned to make a strategic investment in CIVH, worth about $875 million at the time.

Unusual turn of events

Although the appeal from a government department is unusual it is not entirely surprising as the DTIC had previously spoken out in support of the deal, with conditions.

Related:South Africa's CompCom says no to Vodacom-MAZIV deal

In a statement on October 29, 2024, the Ministry confirmed it had participated in the merger proceedings "on public interest grounds" and in line with merger provisions of the Competition Act.

"[The proceedings] led the merger parties committing substantial public interest conditions to significantly boost investments and growth of fibre and mobile connectivity in South Africa. This [is] in line with South Africa's priorities for industrialisation, reindustrialisation, and investment to foster economic growth and create jobs," the statement said.

Last month Vodacom also confirmed that during the Tribunal proceedings the DTIC had described the transaction as having "substantial positive public interest effects" on the basis that the merger parties would commit to significant investment, job creation and improved connectivity for low-income areas and public buildings like schools and police stations.

At the time Vodacom Group CEO Shameel Joosub said he was "deeply surprised and disappointed" by the Tribunal's decision.

"South Africa desperately needs additional significant investment, especially in digital infrastructure in lower income areas," Joosub said.