South Africa’s Competition Tribunal yesterday officially gave Telkom the green light to acquire IT services company Business Connection (BCX).
In May this year, it recommended the proposed acquisition be approved, but did say that it will only be on the grounds of certain conditions, which need to be met by both parties.
During an extremely short press briefing on Wednesday afternoon, CEO Sipho Maseko said Telkom was naturally pleased with the outcome.
“We are very pleased that the Competition Tribunal has approved this acquisition, which will benefit both Telkom and BCX customers,” he said. He added that the transaction has taken about 816 days to come to the point where it is now.
“The last hurdle is closer rather than further away from us. We have also been thinking about how we can grow together and we should be looking at BCX in different dimensions. The last time Telkom entered the African market, it was clumsy, but BCX has a footprint there already, so it can make things a bit easier.”
The Tribunal added that BCX will become a wholly-owned subsidiary of Telkom and needs to de-list from the Johannesburg Stock Exchange (JSE) as soon as the merger is done.
With a merger, there are usually some employees whose duties overlap leading to potential retrenchments; in this case the Tribunal has capped the retrenchments at a maximum of 60 workers.
“The number of job losses arising as a result of the Merger shall be limited to the affected employees, being a maximum of 60 (sixty) employees in positions and grades identified by the Merging Parties over a period of 3 (three) years,” it said in the approval documentation.
Even though Telkom has the go-ahead from the Tribunal, the final approval is still in the hands of the Takeover Regulations Panel and the Johannesburg Stock Exchange; if all goes to plan, the transaction will conclude around the end of August.