India’s Bharti Airtel said in a statement late last week that its unit Airtel Networks Kenya has agreed to merge with Telkom Kenya, the East African nation’s smallest telecom operator.

Bharti Airtel

Bharati Airtel and Telkom Kenya Merger

The deal announced on Friday means shareholders of the two companies will agree to merge their respective mobile, enterprise and carrier services businesses in Kenya to operate under a joint venture company.

The discussions held previously have paved way for a conclusion in the merger of Bharti Airtel to buy Telkom Kenya and create a stronger challenger to market leader Safaricom.

“This move is 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,” said Kenya’s National Treasury Cabinet Secretary Henry Rotich.

Telkom, which is 60 percent owned by London-based Helios Investment, accounted for 9 percent of Kenyan mobile telecom subscribers last September, behind second-placed Airtel, which had a 22.3 percent market share.

The rest of the shares are owned by the Kenyan government.

Both Airtel and Telkom, as well as their respective products and solutions, will continue to co-exist.

Telkom Kenya’s Business

The deal will in no respect involves Telkom Kenya’s extensive real estate holdings and some government contracts for few other services, the company said.

No timeframe has been given for the deal, and both companies will operate as normal until the transaction is success.

It turned out to be privatised in 2007 when French telecoms operator Orange bought a majority stake, which was subsequently sold to Helios in 2015.

Prasanta Sarma, the chief executive of Airtel Kenya, will hold the same role in the combined entity, Telkom said.

The new company will be taken in by Telkom Kenya Ltd’s chief executive officer Mugo Kibati, while Airtel Networks Kenya chief executive Prasanta Sarma will be chief executive.

As a recap, Airtel had a market share of 22.3 percent in Kenya last September.

The closure of the transaction is subject to approvals by the relevant authorities.

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