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MWEB in talks with Dimension Data over sale of telecoms units, report says

29 Aug 2014

According to an unconfirmed report from MyBroadband, speculation is mounting that South African internet service provider (ISP) MWEB is holding talks with technology group Dimension Data, a subsidiary of Japanese telecoms giant Nippon Telegraph and Telephone (NTT), concerning the possible sale of its MWEB Business, MWEB Wi-Fi and Optinet units. Details are sketchy at this time, but it is understood the deal may involve media group Naspers setting up an infrastructure outsourcing agreement with Dimension Data.

Founded in 1998, MWEB Business is a division of MWEB set up to cater for the specific connectivity requirements of South Africa’s medium and large enterprises. Optinet in turn is responsible for the core network and other network infrastructure for MWEB and Naspers. MyBroadband claims that two unnamed independent industry players have confirmed that they are aware of the discussions, but could not provide any further details.

Dimension Data has been busy of late: in January this year it completed the compulsory buyout of AccessKenya shareholders who did not accept the company’s acquisition offer in August 2013. Under the terms of the deal, Dimension Data was required to obtain 90% approval in order to obtain Capital Markets Authority (CMA) backing for compulsory acquisition of the remaining shares. By the end of August 2013 Dimension Data had already achieved 89% approval, and the company has now passed the threshold. An AccessKenya statement at the time said: ‘The remaining shares have been acquired at a price of KES14 (USD0.16) per share which is the takeover offer price. The consideration of the remaining shares has been paid to the company to hold in trust for the shareholders’. Then in February 2014, TeleGeography’s CommsUpdate reported that Dimension Data had acquired ‘certain subsidiaries’ of France-based technology firm NextiraOne for an undisclosed sum. The first part of the process included the acquisition of NextiraOne’s businesses in UK, Germany, Austria, Belgium, the Czech Republic, Ireland, Hungary, the Netherlands, Poland, Spain, Slovakia, Hungary and Luxembourg. Further, Dimension Data agreed to acquire NextiraOne’s operations in France and Italy in mid-2015, provided they meet ‘certain performance conditions’.

South Africa, Dimension Data, MWEB (South Africa)

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