COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: LM038Jul21
In the matter between:
Digital Infrastructure Investment Holdings (Pty) Ltd Primary Acquiring Firm
And
Metro Fibre Networx (Pty) Ltd Primary Target Firm
E Daniels (Presiding Member)
Y Carrim (Tribunal Member)
Panel:
H Cheadle (Tribunal Member)
Heard on: 26 August 2021
Order Issued on: 26 August 2021
Reasons Issued on: 26 August 2021
ORDER
Further to the recommendation of the Competition Commission in terms of section
14A(1)(b) of the Competition Act, 1998 (“the Act”) the Competition Tribunal orders that–
1. the merger between the abovementioned parties be approved in terms of section
16(2)(a) of the Act; and
2. a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule
35(5)(a).
26 August 2021
Presiding Member
Mr Enver Daniels
Date
Concurring: Ms Yasmin Carrim and Mr Halton Cheadle
Date : 26 August 2021
To : Bowmans Attorneys
Case Number: LM038Jul21
Digital Infrastructure Investment Holdings (Pty) Ltd And Metro
Fibre Networx (Pty) Ltd
You applied to the Competition Commission on 01 July 2021 for
merger approval in accordance with Chapter 3 of the Competition
Act.
Your merger was referred to the Competition Tribunal in terms of
section 14A of the Act, or was the subject of a Request for
consideration by the Tribunal in terms of section 16(1) of the Act.
After reviewing all relevant information, and the recommendation
or decision of the Competition Commission, the Competition
Tribunal approves the merger in terms of section 16(2) of the Act,
for the reasons set out in the Reasons for Decision.
This approval is subject to:
x no conditions.
the conditions listed on the attached sheet.
The Competition Tribunal has the authority in terms of section 16(3)
of the Competition Act to revoke this approval if
a) it was granted on the basis of incorrect information for which
a party to the merger was responsible.
b) the approval was obtained by deceit.
c)a firm concerned has breached an obligation attached to
this approval.
The Registrar, Competition Tribunal
Notice CT 10
About this Notice
This form is prescribed by the Minister of Trade and Industry in terms of section 27 (2) of the Competition Act 1998 (Act No. 89 of 1998).
Contacting
the Tribunal
The Competition Tribunal
Private Bag X24
Sunnyside
Pretoria 0132
Republic of South Africa
tel: 27 12 394 3300
fax: 27 12 394 0169
e-mail: ctsa@comptrib.co.za
Merger Clearance Certificate
This notice is issued in
terms of section 16 of
the Competition Act.
You may appeal
against this decision to
the Competition
Appeal Court within 20
business days.
1
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM038Jul21
Digital Infrastructure Investment Holdings Proprietary Limited (Primary Acquiring
Firm)
And
Metro Fibre Networx Proprietary Limited (Primary Target Firm)
Heard on: 26 August 2021
Order Issued on: 26 August 2021
REASONS FOR DECISION
[1] On 26 August 2021, the Competition Tribunal unconditionally approved a large merger
between Digital Infrastructure Investment Holdings (Pty) Ltd (“DIIH”) and Metro Fibre
Networx (Pty) Ltd (“MetroFibre”).
[2] The shares in DIIH are held by Old Mutual Life Assurance Company (South Africa)
Limited (“OMLACSA”) in its capacity as a general partner of African Infrastructure
Investment Fund 3 (“AIIF3”) , in respect of the pooled portfolio of assets of the
Infrastructural, Developmental and Environmental Assets Managed Fund (“IDEAS
Fund”) holding and African Infrastructure Investment Fund 3 GP (Pty) Ltd. OMLACSA
is controlled by Old Mutual Emerging Markets (Pty) Ltd (“OMEM”) which is in turn
wholly owned by Old Mutual Limited (“OML”). DIIH does not own or control any firms
in South Africa. DIIH was established in 2020 for the purposes of facilitating init ial
investments in Metro Fibre Networx (Pty) Ltd (“MetroFibre”) by funds managed and
advised by African Infrastructure Investment Managers (“AIIM”). AIIM is a subsidiary
of Old Mutual Alternative Investment Holdings (Pty) Ltd which is in turn a subsidiary of
OML. AIIM manages AIIF3 and the IDEAS Fund and they first made investments in
MetroFibre in December 2020 (through DIIH) and consequently have (indire ct)
beneficial interests in MetroFibre (“the Primary Transaction”).
[3] The shares in MetroFibre are currently held by the IDEAS fund (through DIIH), AIIF3
(through DIIH), Levoca 805 (RF) (Pty) Ltd (“Levoca”), STOA S.A. (“STOA”), Sanlam
Life Insurance Limited (“Sanlam”), ARC Fund (“ARC”), SPE Team Co -Investment
Partnership (“SPE”) and others, who are not relevant to this transaction. MetroFibre
Partnership (“SPE”) and others, who are not relevant to this transaction. MetroFibre
controls K2020707915 (South Africa) (Pty) Ltd (“K2020”) and Evilet (Pty) Ltd (“Evilet”).
[4] DIIH was formed in 2020, as a special purpose vehicle to facilitate investments in
MetroFibre and does not conduct independent operations.
[5] MetroFibre was launched in 2010 and operates as a provider of Fibre-To-The-Home
(FTTH) and Fibre-To-The-Business (FTTB), supplying both residential and corporate
customers.
[6] Sanlam, ARC and SPE intend to sell their respective interests in MetroFibre to DIIH,
Levoca and STOA. The Commission considered the proposed transaction as a single
indivisible transaction because it involves existing shareholders of MetroFibre
increasing their shares in MetroFibre. From this, the only entity that will acquire a
2
controlling interest in MetroFibre is DIIH. The merging parties confirm that the sale and
purchase of the shares in MetroFibre are all inter-conditional.
[7] The proposed transaction presents no vertical or horizontal overlaps and MetroFibr e
will continue to face competition in the FTTB or FTTH markets from competitors such
as Vumatel, Openserve, Vodacom, Frogfoot, Octotel, Telcom, amongst others. T he
Commission was, therefore, of the view that the proposed merger is unlikely to
substantially prevent or lessen competition in any relevant market.
[8] The merging parties provided an unequivocal statement that there will be no job losses
as a result of the proposed transaction. Regarding the spread of ownership, t he
merging parties submitted that BEE ownership in MetroFibre will be maintained at 30%
following the transaction, in accordance with the requirements stipulated by the
Independent Communications Authority of South Africa (“ICASA”). The merger raises
no other public interest concerns.
[9] We concluded that the proposed transaction is unlikely to substantially prevent or
lessen competition in any relevant market, or to have a negative impact on public
interest.
26 August 2021
Mr Enver Daniels Date
Ms Yasmin Carrim and Mr Halton Cheadle concurring.
Tribunal Case Manager: Camilla Mathonsi
For the Merging Parties: Shakti Wood and Caroline Fairon of Bowman Gilfillan
Inc.
For the Commission: Portia Bele and Grashum Mutizwa