Competition body approves Airtel-Telkom merger

16 Dec 2019

The proposed merger of Airtel Kenya and Telkom Kenya has been authorised by the country’s Competition Authority. The deal was approved on the following conditions: the merged entity shall not sell or transfer its existing operating and frequency spectrum licences; upon expiry of the term of the combined operator’s operating licence, spectrum in the 900MHz and 1800MHz bands held by Telkom shall be returned to the government; and, the merged entity is restricted from entering into any form of sale agreement within the next five years. In addition, the enlarged Airtel-Telkom entity must honour any existing contracts with government bodies.

In February 2019 Telkom and Airtel announced the signing of an agreement to merge their mobile, enterprise and carrier services businesses to create a stronger challenger to market leader Safaricom. However, in August the plan was put on hold, pending an investigation by the Ethics and Anti-Corruption Commission (EACC) into how the deal was brokered. A separate investigation was also opened to establish the circumstances under which the Treasury ceded further ownership of Telkom to Orange Group, which later sold its stake to private equity fund Helios Investment Partners.

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. Bharti Airtel is expected to hold the majority stake in Airtel-Telkom, while Telkom will acquire a shareholding of approximately 32% in the entity.

Kenya, Airtel Africa, Airtel Kenya, Bharti Airtel, Telkom Kenya