IHS Towers won regulatory approval for a plan to acquire 5,713 towers from MTN Group in South Africa, although stringent conditions were imposed because of various competition and public interest concerns raised by the regulator.
The Competition Commission voiced concerns about the possible exclusion of rival independent tower operators and vendors from the market, as well as the potential ostracism of rivals from access to space on the affected towers.
It, therefore imposed a number of measures including a ban on MTN from reducing the number of its employees as a result of the merger for a period of 24 months after closing.
In addition, New York-listed IHS Towers must meet black economic empowerment conditions such as achieving 30 per cent black ownership within 24 months. Furthermore, the tower company must ensure the sites it is buying from MTN are made available to all existing users under the same terms and conditions.
When the deal was originally struck in November 2021, IHS Towers stated it would own 70 per cent of the South African tower business and was in advanced talks regarding the remaining 30 per cent with a consortium of investors participating in the government’s Broad-Based Black Economic Empowerment programme.
IHS Towers is also providing power and related services to around 12,800 MTN sites in the country, and pledged to invest in infrastructure to accelerate rollout of new technologies and enhance the efficiency of existing assets.
It has already appointed Sandile Msimango as CEO of IHS Towers South Africa in anticipation of securing regulatory approval.
In its 2021 results presentation, MTN predicted net proceeds of ZAR5.2 billion ($343.7 million) from the transaction.