Airtel Kenya discontinues merger plans with Telkom Kenya

Airtel Africa has announced the discontinuation of merger plans between its Kenyan subsidiary, Airtel Kenya and Telkom Kenya.

The announcement was made in a notification that was sent to the Nigerian Stock Exchange (NSE) by Airtel Africa and signed by its Group Company Secretary, Simon O’Hara, on Wednesday, August 5, 2020.

The merger plan was announced by both parties in February 2019 and they had agreed to operate under a joint venture company that will be named Airtel-Telkom. The merged entity would have controlled an estimated 34% of the market, which is still nowhere near Safaricom’s 62% market share.

The plan met with a roadblock in August 2019 when the Communications Authority of Kenya (CA) suspended the merger owing to investigations into the intricate details of the deal by the Ethics and Anti-Corruption Commission (EACC)

According to Airtel Africa, “Airtel Networks Kenya Limited (Airtel Kenya), an Airtel Africa Plc subsidiary, and Telkom Kenya Limited (Telkom) amongst other parties, had entered into an agreement dated 8^th February, 2019 to combine their businesses in Kenya, so as to create an integrated telecommunications platform with mobile, enterprise, and wholesale divisions.’’

“The completion of the business combination was subject to the satisfaction of various conditions precedent, including regulatory approvals.”

“Despite Airtel Africa Plc and Telkom respective endeavours to reach a successful closure, the transaction has gone through a very lengthy process which has led the parties to reconsider their stance. Accordingly, Airtel Africa Plc and Telkom have decided to no longer pursue completion of the Transaction.’’

Chief Executive Officer, Airtel Africa Plc, Raghunath Mandava, said Kenya was a large and growing market and reiterated the commitment of Airtel Africa to build a growing profitable business.

“We currently serve more than 14 million Kenyan customers, a number that is growing month on month, and in the last quarter our revenue numbers were up double digit in constant currency in Kenya.

“Our strategy to focus on winning more customers, invest in a best in class voice and data network and progressively expand our mobile money business, will continue to build on these results in order to deliver against the opportunities the Kenyan market has to offer,” Mandava said.