CELL C CLEARS FIRST HURDLE IN SAUDI DEAL

Mergers, Acquisitions and Financial Results

A proposed deal for Cell C to sell 15% of its business to Lanum Securities of Saudi Arabia has been approved by the Competition Commission.

The commission's decision, however, is a minor step in a process whose real hurdle is winning approval from the Independent Communications Authority of SA.

Cell C, which is South Africa’s youngest mobile operator, has asked regulator ICASA to amend the terms of its licence to enable it to sell a 15% stake in the company to a foreign investor.

Cell C’s operating licence stipulates that 40% of the company’s shares must be in the hands of ‘historically disadvantaged persons’, such as black empowerment organisations but the operator wants to reduce this share to 25% in light of this deal.

The cellco is owned by 3C Telecommunications, which itself is 40% owned by CellSaf, a consortium of 30 black empowerment companies and trusts.

The deal, which will water down Cell C's black empowerment profile, will now be assessed by the Competition Tribunal.