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Competition Tribunal approves Telkom/BCX merger

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The Competition Tribunal of South Africa has approved the proposed merger between Business Connexion Group (BCX) and Telkom SA with the imposition of conditions.

Since April 2013, Telkom has embarked on a strategy to improve performance and one of the key considerations in respect of this strategy is to grow beyond its core business of connectivity by expanding into ICT services.

BCX is one of the largest ICT services providers listed on the JSE when measured in terms of turnover, total assets and staff compliment. The company employs more than 6,700 people on the African continent with offices in various African countries, the United Kingdom and Dubai and generates revenue in excess of R6-billion per annum.

“We are very pleased that the Competition Tribunal has approved this acquisition, which will benefit both Telkom and BCX customers,” says Sipho Maseko, Telkom Group CEO. “As a result of this transaction, Telkom will be able to grow beyond its core business of connectivity by expanding into ICT services, while reinforcing our connectivity offering and enhancing Telkom’s convergence strategy.”

Maseko says the proposed transaction will leverage Telkom’s expertise to further address the technology and telecommunications requirements of clients in South Africa and elsewhere in Africa.

“BCX has very strong capabilities in managed IT Infrastructure, including data centres, cloud based services and application development and the merger will enable Telkom to expand its existing offerings whilst, at the same time, providing scale in IT services, which will help reinforce Telkom’s core connectivity business and enhance Telkom’s convergence strategy,” says Isaac Mophatlane, CEO of BCX.

Commenting on the way forward, Mophatlane says he believes that the merger will advance the strategies of both Telkom and BCX and that working together with Telkom will improve both their customer value propositions through a greater ability to provide integrated end-to-end ICT solutions and a more global and competitive offering, particularly on the African continent and beyond.

Final approval will now be sought from the Takeover Regulations Panel and the JSE. The transaction is expected to be concluded by 25 August 2015.