The agreement will see Orange acquire 100 percent of the two companies’ share capital at a combined revenue of about 275million Euros, which is equivalent to Sh30.5 billion.
In a statement, Orange said that the move will strengthen its presence in Africa and add about 5.5 million customers to its mobile customer base.
“This acquisition marks an important step forward in Orange’s dynamic growth strategy and will bring the Group’s African footprint up to 20 countries in 2016,” reads a statement from the company.
If the deal is sealed, Orange will have an additional two more African countries under its footprint adding almost 5.5 million customers to its mobile customer base.
“The outlay for Orange for these transactions will be based on the financials of Airtel’s two subsidiaries for the year ended March 31, 2016 and will represent the equivalent of 7.9 times Airtel’s earnings before interest, taxes, depreciation and amortization in these two countries at this time,” the statement continues.
Additionally, if the agreement is approved by the competent authorities, implementation will be carried out in partnership with subsidiaries of Orange in Côte d’Ivoire and Senegal.
The move follows initial agreements in July last year regarding the potential acquisition of Airtel’s operations in Burkina Faso, Sierra Leone, Chad and Congo Brazzaville. The agreements regarding potential transactions in the remaining two countries have however tumbled.
Lazard and Société Générale were advisors to Orange for this transaction. Airtel was advised by Arma Partners LLP.
The transaction follows Orange’s exit from the Kenyan market after it sold its entire stake to Helios Investment Partners in November last year and an earlier departure from Uganda.