Competition Commission recommends MetroFibre acquisition approval

SOUTH AFRICA – The Competition Commission has recommended the Competition Tribunal approve the proposed transaction whereby Digital Infrastructure Investment Holdings (DIIH) intends to acquire MetroFibre, without conditions.

In June 2021, African Infrastructure Investment Managers (AIIM), along with a consortium comprising South African Housing & Infrastructure Fund, through its Digital Infrastructure Consortium platform and STOA, a foreign investment vehicle-based in France, agreed to acquire a 25.8% interest in MetroFibre Networx held by Sanlam Private Equity, African Rainbow Capital and a minority shareholder.

In a press statement, the commission says DIIH was formed as a special purpose vehicle to facilitate investments by funds managed by AIIM in MetroFibre in 2020 and does not conduct independent operations.

It noted that AIIM is a subsidiary of Old Mutual Alternative Investment Holdings, and the company develops and manages private equity infrastructure funds designed to invest in long-term institutional unlisted equity in African infrastructure projects.

The acquiring group provides individuals, businesses, corporates and institutions with long-term savings protection, investment and lending solutions.

The acquiring group also operates as an insurance company providing life, health and disability insurance services, it notes.

MetroFibre was launched in 2010 and operates as a provider of fiber-to-the-home and fiber-to-the-business.

The fiber network operator has expanded its service offering to both residential and corporate customers in line with its strategic objective of being a diversified operator.

It owns and manages its core network, which is a globally compliant Carrier Ethernet 2.0 open access network.

The commission found the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets.

It further found the proposed transaction does not raise any substantial public interest concerns.

The transaction followed the R1.5 billion (US$97.8 million) equity funding round concluded in December 2020 by AIIM, SAHIF and STOA in order to support MetroFibre’s R3 billion (US$196 million) capital expansion plan over the next three years.

The transaction also introduced the Old Mutual Hybrid Equity Fund 1 General Partnership, managed by Hybrid Equity (HE), a division of Old Mutual Alternative Investments, as funding provider to SAHIF, which is owned by Rali Mampeule and Kameel Keshav and is the strategic empowerment partner to MFN.

The investment reinforces AIIM, SAHIF and STOA’s belief in the potential of the digital infrastructure sector in SA and their support for the management team of MFN.

MetroFibre, which was launched in 2010, is a high-growth player in South Africa’s fiber-to-the-home and fiber-to-the-business markets.

Over the last 10 years, MetroFibre has expanded its service offering to both residential and corporate customers, in line with its strategic objective of being a diversified operator.

MetroFibre owns and manages its core network, which is a globally compliant Carrier Ethernet 2.0 open access network.

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