South African Competition Tribunal grants conditional approval for Vumatel-Herotel transaction

Compass Lexecon advised Community Investment Ventures Holding (‘CIVH’), parent company of Vumatel, and Vumatel on the acquisition of Hero Telecoms (‘Herotel’). Vumatel and Herotel are, respectively, South Africa’s first and third largest fibre network operators. The transaction was investigated for potential horizontal and vertical issues. The Competition Appeal Tribunal of South Africa approved the transaction, subject to conditions to address competition and public interest-related issues, in December 2025.

Situation

Vumatel and its parent company, CIVH, announced the acquisition of a 45% non-controlling stake in Herotel in February 2022. In August of that same year, it announced its intention to increase its share to 100%. Vumatel is South Africa’s largest wholesale fibre-to-the-home (‘FTTH’) provider, while Herotel operates across multiple layers of the telecommunications market, with a focus on connectivity in smaller towns and cities. The acquisition will assist Vumatel to bring more affordable, high-speed fibre to lower-income communities, thereby bridging South Africa's digital divide.

The transaction was notified to the South African Competition Commission in June 2022 and classified as a Large merger.

Our role

Compass Lexecon was retained by parent company, CIVH, and Vumatel since early 2022. We submitted an expert report and a large number of supplementary analyses to the South African Competition Commission covering horizontal and vertical theories of harm, as well as efficiencies. Compass Lexecon also supported counsel and the legal team before the Competition Tribunal of South Africa.

Outcome

The South African Competition Commission recommended to greenlight the transaction in March 2025. The Competition Appeal Tribunal approved the deal in December 2025. The approval was subject to conditions addressing competition concerns, and with a heavy emphasis on public-interest obligations related to accelerated fibre deployment in low-income communities.

The team

Compass Lexecon’s team was led by Paul Reynolds and included Gytautas Karklius, Jussi Kerttula, and Finn Spratt. Compass Lexecon worked closely with the excellent legal team from DLA Piper, headed by Janine Simpson.