The Competition Commission of South Africa has approved the proposed acquisition of CMC by Digital Centre, subject to certain conditions.
Digital Centre, a company incorporated in Saudi Arabia, is a wholly-owned subsidiary of Saudi Telecom Company (STC), which is controlled by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF). The Acquiring Group, which includes PIF, STC, and Digital Centre, operates in South Africa through businesses in renewable energy, water production, and mining of gold, silver, zinc, and copper.
The primary target firm, CMC, is controlled by CMS Holdings and ultimately by the Carlyle Group, a private equity firm. In South Africa, CMC operates through CMC Network Proprietary Limited, providing wholesale connectivity solutions and managed services.
The Commission concluded that the transaction is unlikely to significantly reduce or prevent competition in any market. However, since the merger will proceed in two tranches, it is stipulated that tranche two must be notified if not implemented within 24 months of tranche one.
Additionally, to address public interest concerns, the merger parties have committed to implementing a Historically Disadvantaged Persons (HDP) transaction following the completion of tranche two.
