20 June 2008
Fujitsu Siemens Computers has sold a stake of 25% plus one share in its South African operations to black economic empowerment group the Thuthukani Investment Consortium, for an undisclosed sum.
The consortium consists of Thuthukani Information Technology (IT) Services, Amava Holdings and an additional broad-based black economic empowerment trust.
In a statement this week, Fujitsu Siemens states that the transaction is unique in nature, as it is the first multinational computer maker to have sold equity in its local operation to an empowerment group – with the consortium being set up as a special purpose vehicle to facilitate the deal.
Other multinationals have opted for an alternative route, allowed for under South Africa’s empowerment legislation.
According to a Business Day article on the deal this week, “equity equivalents” are an instrument whereby multinationals can calculate the value of 25% of their local operations and invest that sum into schemes such as training and social responsibility initiatives.
Fujitsu Siemens Computers South Africa MD Idris Suleman said that the empowerment transaction began when his predecessor convinced the board of directors of the need to engage with an empowerment grouping, about two-and-a-half years ago.
Meaningful contribution
“The board gave its approval, but tasked us with finding the right partner, one who would grow with us,” said Suleman. “In addition, the board required that we do not engage in any form of ‘window-dressing’, but that we conclude a deal that will be meaningful for the company and the broader socio-political environment of the country.”
Fujitsu Siemens Computers South Africa appointed PricewaterhouseCoopers Corporate Finance as their lead adviser, ensuring a strict adherence to governance principles and to give a level of comfort and independence to the board of the holding company.
Fujitsu Siemens president and CEO Bernd Bischoff pointed out that the South African and African markets were extremely important to the company’s overall business strategy, and it therefore had a responsibility to have a positive influence on every aspect of the business environments in which it operates.
“Through engaging in a transaction of this nature, I believe that we are making a positive contribution to South African society, particularly as this ensures that the fruits of our endeavours will be shared across a broader base of the economic spectrum,” he said.
Seeking entrepreneurs
After meeting with and reviewing several potential suitors, and conducting thorough due diligence exercises on all prospects, PricewaterhouseCoopers introduced the Thuthukani Investment Consortium, with the belief that they offered the best prospects in terms of cultural and value alignment.
According to Fujitsu Siemens, the company felt that the strong-entrepreneurial nature of the members of the consortium and the direct involvement of the principals in the companies, matched its own style and approach to business.
“We were presented with a unique opportunity to invest,” said Thuthukani IT Services MD Fannie Mahlangu, who has since been appointed to the board of directors of Fujitsu Siemens Computers South Africa.
“What we found appealing about Fujitsu Siemens Computers, was that the company has tremendous potential for growth and is complementary to our business. Additionally, there was a strong cultural and philosophical match between us,” he said.
Amava Holdings CEO Puven Ramasamy pointed out that Fujitsu Siemens Computers, with its portfolio of hardware and services would complement several of the company’s previous investments.
“With this transaction, we continue to emphasis our focus on the IT sector,” he said.
Not the usual suspects
Suleman pointed out that Fujitsu Siemens Computers South Africa was adamant in not wishing to take on “the usual suspects” in its empowerment transaction, stating that it was critical for the company to find a partner whose values were in alignment with their own, and had a hunger to take the business to new heights.
“In the Thuthukani Investment Consortium, we have found a group of emerging entrepreneurs who epitomise all that is good about empowerment,” he said. “Having had the opportunity to learn more about both Thuthukani and Amava, I am confident that we have made an excellent choice and that we will complement one another’s business and grow together into the future.”
SAinfo reporter
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