Competition Tribunal approves the merger between BCX and Telkom

Business Connexion Group Limited (“BCX” or “the Company”) announces that on 4 August, the Competition Tribunal of South Africa approved the acquisition of Business Connexion Group Limited (“BCX”) by Telkom SA SOC Limited (“Telkom”) with conditions, this was subsequent to the approval obtained from the Fair Competition Commission of Tanzania. The Takeover Regulations Panel have issued the compliance certificate and the Johannesburg Stock Exchange (JSE) has also given its written approval for the delisting of BCX Shares. We expect the transaction to be concluded by 25 August 2015.

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.

“We are very pleased that the Competition Tribunal has approved this acquisition, which will benefit both Telkom and BCX customers,” said Sipho Maseko, Telkom Group Chief Executive Officer. “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 said 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.  According to Maseko, BCX’s footprint in Africa will also enable Telkom to have an appropriate position for how it does business on the continent going forward. “The last time we went into the continent as Telkom it didn’t go that well. We believe with BCX existence in various countries in Africa, it provides a favourable environment for us to access Africa’s growth opportunities even further” he said.

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 (including Tanzania), the United Kingdom and Dubai and generates revenue in excess of R6 billion per annum.

Maseko noted the integration process of the companies will be in the reverse, where Telkom’s business will be integrated into BCX. “That makes sense; it’s strategic, correct and it enables us to tap into their capability”.

“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”, said Isaac Mophatlane, Business Connexion Group Chief Executive Officer.

Maseko reiterated Telkom’s commitment to Business Connexion as a long-term investor. Telkom has a strong commitment to social development and ongoing transformation goals, including broad-based black economic empowerment (B-BBEE) and the ICT Charter. Telkom regards ICT services as a key enabler for economic growth.

Commenting on the way forward, Mophatlane said 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.

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