Remgro CEO slams regulators over deal delays

Remgro CEO Jannie Durand. Image: Remgro

Remgro CEO Jannie Durand has criticised South African regulators for the time it takes to get deals concluded, saying this is undermining investor confidence.

Although Durand didn’t name any regulators in his comments during a presentation of Remgro’s financial results for the six months to 31 December 2023, it was clear that he was voicing his frustration at the competition authorities.

Among other transactions, Remgro — specifically, its 57%-owned subsidiary CIVH — is fighting to get approval for a multibillion-rand fibre deal with Vodacom.

We need growth, but we need a more enabling environment for doing business – and a lot less red tape

In a surprise move , the Competition Commission last August recommended to the Competition Tribunal that the deal, in which Vodacom would acquire 30% of CIVH’s Maziv – the holding company of Vumatel and Dark Fibre Africa – be blocked.

Vodacom and CIVH are expected to present their case to the Competition Tribunal at hearings set down for three weeks in May and June. Remgro management, led by Pieter Uys, have spent considerable time preparing for those hearings, with Uys on Tuesday expressing confidence that the deal will still get approval from the tribunal, despite the commission’s objections.

In remarks on Tuesday to Remgro shareholders, Durand said the enormous amount of time it now takes to get regulatory approvals for mergers and acquisitions creates unnecessary uncertainty for investors, knocking confidence and impacting jobs.

Uncertainty

“The uncertainty with regulatory approval creates uncertainty for foreign investors to invest in our country,” he said. “We have a beautiful country with much potential. We need growth, but we need a more enabling environment for doing business locally — and a lot less red tape… If you spend two or three years getting deal approvals, people do get deal fatigue in that phase.”

Read: High interest rates sting Vumatel parent CIVH

At the same presentation, Uys said the parties to the Maziv/Vodacom transaction last week submitted further concessions to the competition authorities that they believe will satisfy those who have objected to the deal, including MTN and Rain. They have also agreed that Maziv will:

Invest at least R10-billion over the next five years in expanding its network, with much of this money flowing into new fibre infrastructure in lower-income areas. Facilitate the creation of 10 000 new jobs over five years. Establish a development fund worth R300-million over the next three years, with the money to spent over the next five years to facilitate the development of small, medium and micro enterprises.

CIVH chairman Pieter Uys

In addition, Vodacom will contribute more than R4-billion in fibre network assets, which will be made available to the market on an open-access basis, Uys said. This is on top of at least R6-billion in cash that Vodacom will contribute for its 30% stake in Maziv (it has the option to increase its shareholding to 40%). – © 2024 NewsCentral Media

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