Indian telecoms company Bharti Airtel has revealed that it will hold the majority stake in Airtel-Telkom, the mobile operator set to be formed from the merger of Airtel Kenya and Telkom Kenya. According to Airtel Africa’s IPO prospectus, Telkom Kenya will acquire a shareholding of approximately 32% in the combined entity, noting that ‘the formula for calculating the respective shareholding percentage of Telkom Kenya on completion will take into account the relative revenues (for the past twelve months prior to the closing of the business transfer) of each business being contributed’. Telkom Kenya also has a call option – exercisable in the 24 months following completion of the business transfer – to increase its stake up to 49%.
In February 2019 Telkom Kenya and Airtel Kenya announced the signing of an agreement to merge their mobile, enterprise and carrier services businesses to create a stronger challenger to market leader Safaricom. The pair state that the combined entity will benefit from ‘enhanced scale and efficiency, larger distribution network and strategic brand presence, thereby enhancing the range and quality of products and service offerings in the market, and greater choice and convenience to the consumer.’ TeleGeography’s GlobalComms Database states that Telkom is 60% owned by Helios Investment Partners, with the remainder held by the government, while Bharti Airtel is the 100% shareholder of Airtel Kenya. The finalisation and closure of the transaction is subject to approval by the relevant authorities.