Tribunal eases conditions imposed on Airtel-Telkom merger

6 May 2020

Airtel Kenya and Telkom Kenya will be permitted to sell up to 40% of their combined business, after appealing some of the conditions imposed on their proposed merger by the Competition Authority of Kenya in December 2019, reports Business Daily. Earlier this year, the pair sought a review of the condition that restricts the merged entity from entering into any form of sale agreement within the first five years. In addition, Airtel and Telkom protested the condition that bars the merged entity from selling or transferring its existing operating and frequency spectrum licences. In its recent ruling, the Competition Tribunal maintained that the merged entity cannot be bought off, but it can offer new shares to third parties to raise fresh capital, as long as the buyers do not already control more than 40% of Kenya’s voice or internet market. The Tribunal ruled that the merged entity should be permitted to transfer its licences in line with conditions imposed by the Communications Authority (CA).

TeleGeography’s GlobalComms Database states that Telkom and Airtel announced the signing of an agreement to merge their mobile, enterprise and carrier services businesses in February 2019 to create a stronger challenger to market leader Safaricom. Telkom is 60%-owned by Helios Investment Partners, with the remainder held by the government, while Airtel Africa is the 100% shareholder of Airtel Kenya. 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