Grace Ashiru
The South African Competition Commission has granted conditional approval for the acquisition of Octotel by a consortium led by African Infrastructure Investment Managers, which includes STOA and Thebe Investment Corporation. This transaction will see the consortium take ownership of Octotel from Actis, a UK-based investment firm. The approval comes on the heels of substantial growth and expansion of Octotel over the past four years, following Actis’ investment in the company.
In March 2024, global investor Actis announced its agreement to sell Octotel, a South African fiber network operator, to a consortium, with the deal awaiting regulatory approval. The competition watchdog has since disclosed its decision to greenlight the transaction, concluding that the proposed merger would not “substantially lessen or prevent” competition in the telecommunications infrastructure market.
The competition regulator also addressed employment concerns, stating that the merged entity will not be permitted to retrench employees for two years following the merger’s implementation date. Additionally, the consortium is set to acquire a minority stake in RSAWeb, an Internet service provider, subject to the usual regulatory approvals and closing conditions.
Following Actis’s recent acquisition of Swiftnet — Telkom’s masts and towers business — for R6.75 billion ($374.3 million), a deal now approved by the Competition Commission, the firm continues to expand its footprint in South Africa’s telecommunications sector.
Back in December 2020, Actis secured a majority stake in Octotel for R2.3 billion ($128.5 million), a strategic move aimed at capitalizing on the surging demand for high-speed connectivity and the rapid growth in data consumption across the country. Actis’s investment approach has focused on expanding fibre network connections to more households and driving higher adoption rates within the network.
This approach has reportedly driven substantial growth for the company, with the number of homes passed with fiber expanding from 195,000 to 350,000. During the same period, the number of connected customers increased from 56,000 to 110,000.
According to the Competition Commission, the full transaction structure reveals that the primary acquiring firm is controlled by STOA and IDEAS Infrastructure II GP (Pty) Ltd (IDEAS), a domestic private infrastructure fund managed by AIIM, a private equity fund manager ultimately under the control of Old Mutual.
Commenting on the collaboration, Trevor van Zyl, CEO of Octotel, expressed his enthusiasm, stating, “Teaming up with AIIM, STOA, and Thebe marks an exciting new chapter for Octotel and RSAWeb. Together, we are set to accelerate our mission of providing cutting-edge connectivity solutions, driving economic growth, and fostering innovation throughout the region.”
