MTN announced earlier this year that it had entered into an agreement to acquire the 75% of IHS shares it does not already own.
The Competition Commission has recommended that the Competition Tribunal approve the proposed transactio of MTN’s purchase. Picture: Moneyweb
The Competition Commission has recommended that the Competition Tribunal approve the proposed transaction in which MTN, through its Cayman‑registered subsidiary Sub‑Merger Co, intends to acquire global tower operator IHS Holding Limited, subject to conditions to safeguard competition and the public interest.
Agreement
MTN announced earlier this year that it had entered into an agreement to acquire the 75% of IHS shares it does not already own for $2.2bn (R36bn) in an all-cash transaction.
It expects the acquisition to increase service revenue and expand core earnings margins.
The mobile service operator will use approximately $1.1 billion (R17.7 billion) of cash on IHS’ balance sheet, along with available liquidity and debt, to finance the purchase.
The Commission found that while the deal would consolidate MTN’s position in the communications infrastructure market, it raised concerns around employment, customer rights, historically disadvantaged persons (HDPs) ownership, and fair access to tower infrastructure.
The transaction
The acquiring firm, Sub‑Merger Co, is wholly owned by MTN, a Netherlands‑incorporated global mobile network operator.
Through its South African subsidiaries, MTN provides fixed and mobile voice and data services, messaging, handsets, undersea cable capacity, and wholesale services.
The target firm, IHS, incorporated in the Cayman Islands, is a global tower operator with operations in several countries, including South Africa.
IHS develops, owns and operates shared communications infrastructure, focusing on tower construction, maintenance, power innovation and site security.
Competition concerns
The Commission noted that the merger could affect market dynamics, particularly in the tower infrastructure sector, where IHS provides services to multiple mobile network operators (MNOs).
To mitigate risks, the Commission has recommended conditions that:
- Protect jobs and promote HDP ownership.
- Preserve customer rights and ensure lease renewals are negotiated fairly.
- Guarantee fair access to infrastructure for MNOs and non‑MNO customers.
- Prevent preferential treatment of MTN South Africa.
- Safeguard sensitive customer information.
- Support SMME and HDP participation in new tower sites.
- Maintain IHS independence as an operational entity.
Public interest safeguards
The Commission stressed that the conditions are designed to balance the benefits of the transaction with the need to maintain a competitive, dynamic and inclusive economy.
“The safeguards are intended to ensure that the deal supports transformation, protects jobs, and preserves the independence of IHS, while preventing any unfair advantage to MTN South Africa,” the Commission said.
Next steps
The matter now proceeds to the Competition Tribunal, which will make the final determination on the merger.
If approved, the transaction will reshape the communications infrastructure landscape, but under conditions that ensure transparency, fairness, and protection of smaller players in the market.
