Telkom Kenya Limited and Airtel Networks Kenya Limited have announced their plans on merging into one, and shared some details on the merger operations.
In a statement to the press on Friday, February 7, it is clear that they will operate as one entity under the name Airtel-Telkom, and under the agreement Telkom Kenya has the option of holding up to 49% of the shareholding.
Airtel-Telkom will be chaired by recently appointed Telkom Kenya Limited CEO Mugo Kibati while Prasanta Sarma, the CEO of Airtel Networks Kenya will be appointed to be the CEO of the merged entity .
The merger will however be effective after regulatory authorities approve the partnership Telkom Kenya Limited and Airtel Networks Kenya Limited have entered into a binding agreement that will see them operate as a single entity. The agreement will see the two companies merge their mobile, enterprise and carrier services business and operate under one name in Kenya.
The agreement was however explicit that Telkom Kenya Limited’s real estate portfolio and specific government services will not form part of the combined entity set to be unveiled in the near future. Final shareholding of the companies will be determined when the transaction is concluded.
The finalisation and conclusion of the merger deal is dependent on the approval of relevant regulatory authorities. According to the agreement Airtel Networks Kenya Limited (Airtel Kenya) and Telkom Kenya Limited (Telkom Kenya) will see no immediate changes to their current operations. There will also be no change to the current respective leadership and management, legal, organisational and staffing structures of the two companies.
Their separate brands and respective products will continue to co-exist. The agreement indicates the two partners will combine operations in Kenya in a bid to establish an entity with enhanced scale and efficiency, larger distribution network and strategic brand presence. This move is set to enhance the range and quality of products and service offerings in the market to offer a greater choice and convenience to their consumers.
The combined entity will see sustained investments in networks to further accelerate roll out of future technologies. “Enterprise and carrier services businesses will get a boost with a larger fibre footprint and increased number of enterprise customers. This will include both large corporations and SMEs who would have access to a diverse portfolio of world-class solutions,” the statement indicated.
National Treasury Cabinet Secretary (CS) Henry Rotich said move was well aligned with government’s agenda to optimize value of assets it holds in trust on behalf of Kenyans. “This will cement country’s position not only as a regional business hub but also as an international investment magnet,” Rotich said.
Information Communication Technologies CS Joe Mucheru said such mergers have had positive impact on development of the sector and service levels to consumers in other markets. “We look forward to this merger leading to the introduction of new technologies and telecommunication products which will, in turn, support the growth of other business sectors of our economy,” Mucheru said.