NET1 GETS COMPETITION TRIBUNAL’S GREEN LIGHT TO ACQUIRE OVOBIX AND LUXANIO

THE COMPETITION Tribunal yesterday gave the green light to Net1 Applied Technologies South Africa acquiring Ovobix and Luxanio 227 for R3.7 billion. On October 31, 2021, the deal was announced. Ovobix and Luxanio are investment holding companies holding shares in two firms and do not carry out any other business activities. In South Africa, the target group provides services in relation to, among others, automated cash management, card payment solutions as well as VAS (prepaid and value added services) and unsecured short-term business loans to the South African retail sector. The tribunal said it approved the proposed transaction subject to a set of conditions, including the establishment of an employee share ownership programme (Esop) for the benefit of workers. The tribunal’s imposed conditions include a provision that Net1 Inc establish an Esop for the benefit of workers of the merged entity to receive shareholding in Net1

Inc equal in value to at least 3 percent of the issued shares in Net1 Inc as at the implementation date of the proposed transaction, in accordance with certain

Esop design principles. The Competition Commission ultimately had concluded that the proposed transaction was unlikely to result in any competition concerns. “The tribunal has no reason to disagree with the commission’s assessment and has concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market,” it said, adding that he transaction would not result in any retrenchments. There were pre-merger retrenchments at Net1 SA due to operational reasons unrelated to the merger. |