The South African Competition Commission has accepted US-listed Digital Realty’s purchase of 55 per cent of data centre group Teraco Data Environments. However, the commission has listed conditions for the sale.
In a recent statement, the regulator indicates that the proposed transaction is not expected to substantially prevent or decrease competition in any relevant markets.
The commission also found that the agreement would have a negative impact on ownership.
In addressing the matter, the regulator stated that the merging entities “have approved the imposition of a condition that would certify that the merged parties maintain the current B-BBEE trust and also introduce an employee share ownership plan in the merged entity.”
The Digital Realty deal values Teraco at US$37 billion.
Digital Realty is currently listed on the New York Stock Exchange. It defines itself as the “largest global provider of cloud and carrier-neutral data centre, co-location and interconnection solutions” and is obtaining the majority stake in Teraco from various pools of investors, counting Berkshire Partners as well as Permira.
Moreso, Teraco management will remain invested in the entity.
Teraco manages seven data centre facilities with 75MW of power load, providing services to more than 600 clients, including international companies.
Teraco’s client base includes connectivity providers, managed service providers, cloud companies, content providers, enterprises and financial services firms.
In a statement released by Teraco in January, the group indicated that Digital Realty’s growth will result in a powerful combination providing Teraco access to capital to grow.
After the deal, Digital Realty will own about 55% of the total equity interest in Teraco, while a consortium of existing shareholders will hold the remaining 45%.