Telkom, Airtel Kenya Announce Merger In A Bid To Outdo Safaricom

Telkom Kenya Limited and Airtel Networks Kenya Limited, today announced the signing of a binding agreement that will see the shareholders of the companies enter into an agreement to merge their businesses in Kenya to operate under a joint venture company to be named Airtel-Telkom.

According to Telkom Kenya, they real estate portfolio which consist of huge tracts of land previously owned by the government and gifted to Orange which later sold the entity to Helios will not be part of the deal. Telkom Kenya also handled some high level government businesses which will not form part of the deal.

The final details of the shareholding has not been announced but the company will have a new leadership with the current Telkom Kenya CEO holding Chairman position while Airtel Networks Kenya Chief Executive, Mr. Prasanta Sarma, will be appointed Chief Executive Officer.

Helios Investment owns 60 per cent of Telkom Kenya Limited while the Kenyan government owns the remaining 40 per cent.

Airtel is fully owned by Indian company, Bharti Airtel.

Finalisation and closure of the transaction is subject to approval by the relevant authorities.

Airtel Networks Kenya Limited (Airtel Kenya) and Telkom Kenya Limited (Telkom Kenya) will see no immediate changes to their operations which will continue as usual.

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There will also be no change to the current respective leadership and management, legal, organisational and staffing structures.

Additionally, both brands: ‘Airtel’ and ‘Telkom’, as well as their respective products and solutions, will continue to co-exist.

Service delivery to the respective companies’ customers as well as engagement with all business partners of both companies will continue to operate as usual.

As per the agreement, both the partners will combine their operations in Kenya and establish an entity with 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.

Speaking after the deal was struck, National Treasury Cabinet Secretary Henry Rotich said the move is well aligned with the government’s agenda to optimise the value of the assets that it holds in trust on behalf of Kenyans, while cementing the country’s position not only as a regional business hub but also as an international investment magnet.

ICT Cabinet Secretary Joe Mucheru lauded the deal saying that it will have a great impact in the country’s economy.

“Such mergers have had positive impact on the development of the sector and service levels to consumers in other markets,” said CS Mucheru.