COMPETITION TRIBUNAL OF SOUTH AFRICA
Case NO: 29/LM/Apr08
In the matter between
Saudi Telecom Company Primary Acquiring firm
And
Oger Telecom Ltd Primary Target Firm
Panel : Y Carrim (Tribunal member); M Mokuena (Tribunal member) and T
Orleyn (Tribunal member)
Heard on : 16 April 2008
Decided on : 16 April 2008
Reasons Issued : 07 May 2008
Reasons for decision
Approval
[1] On 16 April 2008 the Competition Tribunal issued a Merger Clearance Certificate
approving the merger between Saudi Telecom Company and Oger Telecom Ltd
unconditionally. The reasons for the approval of the merger appear below.
Parties
[2] The primary acquiring firm is Saudi Telecom Company (“STC”), a company
incorporated under the laws of the Kingdom of Saudi Arabia. STC is controlled by the Public
Investment Fund, a Saudi government owned entity. 1
[3] The primary target firm is Oger Telecom Ltd (“OT”), a company incorporated under the laws
of the Dubai International Financial Centre. OT is jointly controlled by Saudi Oger Ltd (“SO”), with
1 The Public Investment fund holds 70% shares in STC. The remaining shares are owned
by the Public Pension Agency with 5%, the General Organisation for Public Insurance with
5% and 20% is owned by the public.
1
35% shares and Oger Telecom Saudi Arabia Ltd with 45%. 2
[4] In South Africa, OT controls Oger Telecom (South Africa) Holdings (Pty) Ltd (“OTSA”) and
Lanun Securities SA (“Lanun”). OTSA together with Lanun have 75% shareholding in 3C
Telecommunications (Pty) Ltd (“3C”) 3, which in turn, controls Cell C (Pty) Ltd (“Cell C”). 4
Transaction
[5] In terms of the proposed transaction, STC intends to acquire 35% of the shares in
OT. Upon completion, STC will have joint control in OT.
Parties Activities
[6] STC offers fixed and mobile voice data and services as well as internet services to
personal, homes and enterprise users in Saudi Arabia and internationally. It does not
provide any products or services in South Africa.
[7] OT provides telecommunications services in Turkey and Middle East, operating
fixedline, mobile communications and internet access businesses. OT also owns a major
regional ISP which operates in Saudi Arabia, Lebanon and Jordan. In South Africa, OT
operates through Cell C.
[8] Cell C provides mobile voice and mobile data telephone services. It offers a wide
range of mobile cellular products and services, including prepaid and contract airtime
packages.
Rationale for the transaction
[9] This transaction offers STC with an opportunity to enter into two of the largest and
most advanced emerging telecom markets, i.e. South Africa and Turkey.
[10] OT hopes to benefit from STC’s broad and in-depth experience in
operating fixed-line and mobile networks in Saudi Arabia, bringing significant
2 OTSA holds 60% and Lanun holds 15%. The remaining 20% of shares of OT are held by
various institutional investors, with each holding less than 5%.
3 The remaining 25% shareholding in 3C is held by CellSAf, a consortium of historically
disadvantaged persons.
4 Cell C wholly owns and controls Cell C Service Provider Company (Pty) Ltd and Cell C Property
Holdings Company (Pty) Ltd. In addition, Cell C also jointly controls Virgin Mobile South Africa.
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value and also support further development in its operations.
Competition Analysis
[11] There is an overlap between the activities of the merging parties in respect of the
provision of mobile telecommunications. There is, however, no geographic overlap in the
activities of the merging firms as the acquiring firm is not active in South Africa.
[12] Based on the above, the transaction will not result in a substantial lessening or
prevention of competition.
Conclusion
[13] There are no significant public interest issues and we accordingly approve the
transaction without conditions.
___________________ 07 May 2008
Y Carrim Date
Tribunal Member
M Mokuena and T Orleyn concurring.
Tribunal Researcher : I Selaledi
For the merging parties : Deneys Reitz and Werksmans
For the Commission : Makgale Mohlala and Mogalane Matsimela
(Mergers & Acquisitions)
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