The Competition Commission has approved US-listed Digital Realty’s acquisition of 55% of South African data centre group Teraco.
Digital Realty’s acquisition“The commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets,” the regulator said in a statement on Tuesday. However, it found that the deal “is likely to result in a negative impact on a greater spread of ownership”.
To address this, it said the merging parties “have agreed to the imposition of a condition that would ensure that the merged entity maintains the current B-BBEE trust and, further, introduce an employee share ownership plan in the merged entity”.
Teraco operates seven data centre facilities with 75MW of critical power load, serving more than 600 clients, including global Internet companies. Clients include connectivity providers, managed service providers, cloud companies, content providers, enterprises and financial services firms.“The Digital Realty transaction will result in a powerful combination providing Teraco continued access to capital to grow,” Teraco said in a statement in January.
Existing Teraco investors, including “several leading global digital infrastructure investors with significant experience investing in Africa”, are keeping a “significant portion of their equity interests, demonstrating their conviction in Teraco’s future growth prospects”, the company said. After closing, Digital Realty will own about 55% of the total equity interest in Teraco, while the remaining 45% will be held by a consortium of existing shareholders, including management, Berkshire Partners, Permira, Van Rooyen Group, Columbia Capital, Stepstone Ventures and the Teraco Connect Trust. –
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