Final push for Vodacom-Maziv R13 billion deal

Through this deal, Vodacom is looking to acquire a 30% interest in Maziv, which will house all the fibre assets owned by Remgro’s Community Investment Ventures Holdings (CIVH), including Vumatel and Dark Fibre Africa.

In 2024, the Competition Tribunal blocked this transaction due to antitrust concerns, dealing a significant blow to the two companies’ plans.

However, the companies managed to reach a deal with the Competition Commission for revised conditions meant to get this deal over the line.

The telecoms giant and Remgro will now turn to the Competition Appeal Court, which is scheduled to hear the matter from 22 to 24 July.

In addition, to help the deal get the green light, the two companies have revised and expanded the transaction’s conditions, which were outlined in a market announcement on Friday, 18 July.

Vodacom will still acquire a 30% interest in Maziv and will invest around R13 billion in the business, valuing the existing Maziv business at R36 billion.

This will create an enlarged business of over R47 billion should the transaction be approved and completed.

The investment will be in the form of cash and fibre assets, making Vodacom a 30% shareholder in Maziv.

Vodacom’s approximately R13 billion investment in Maziv will consist of the following:

• Access fibre network infrastructure valued at R4.9 billion in return for new shares in Maziv
• R6.1 billion in cash to subscribe for new shares in Maziv

• Buying additional Maziv shares from CIVH to reach 30% shareholding, which is estimated to cost R2.5 billion

   

The companies explained that Maziv plans to reset its capital structure by declaring a pre-implementation dividend of up to R4.2 billion in anticipation of this cash injection from Vodacom.

If this dividend is declared, Vodacom’s cash payment will be reduced by up to R1.3 billion. Therefore, Vodacom’s aggregate transaction price will amount to R 12.2 billion.

This represents a pre-acquisition transaction equity value of R 29.8 billion or R 34.0 billion if no pre-implementation dividend is declared.

Another transaction term relates to Maziv’s post-2021 acquisition of a 49.96% stake in Hero Telecoms.

As part of this deal, Vodacom will subscribe for additional new shares in Maziv as consideration for its 30% of Maziv’s stake in Herotel for around R0.6 billion in cash.

This increases the overall transaction equity valuation, post the full preimplementation dividend, from R 29.8 billion to R 31.8 billion, or R 36.0 billion if no preimplementation dividend is declared.

In addition, Maziv is currently in the process of obtaining approval to acquire an additional 49.93% of Herotel. Should this deal be approved, Vodacom has agreed to acquire even more shares in Maziv.

Therefore, Vodacom’s option to increase its investment in Maziv – which was originally for an additional 10.00% – is now for up to 4.95 %. 

Should the option be exercised, Vodacom will own 34.95% of the issued ordinary shares in Maziv.

The parties have also extended their transaction longstop date to 30 September 2025, with the ability to further extend to 30 November 2025.

“As CIVH, we are very pleased to have reached an agreement with Vodacom on the revised terms of this transaction given our shared vision regarding the value of a world-class open-access fibre network to bring quality and affordable internet to South Africa,” CIVH chairman Pieter Uys said.

“We are grateful to the Competition Commission for their constructive engagement and are hopeful that the amended terms contribute to a favourable resolution to the appeal process.”

Issued on Daily Investor by Bianke Neethling | https://dailyinvestor.com/telecommunications/94788/final-push-for-vodacom-maziv-r13-billion-deal/