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Telkom Kenya and Airtel announce plan to merge under Joint Venture agreement

Telkom Kenya has the option of holding up to 49 per cent of that shareholding. 

NAIROBI, Kenya, Feb 8 – Telkom Kenya Limited and Airtel Networks Kenya have signed a binding agreement to merge their respective Mobile, Enterprise and Carrier Services businesses in Kenya.

The proposed merger will operate under a joint venture company to be named Airtel-Telkom, said a statement signed by both telcos.

“Telkom Kenya Limited’s real estate portfolio and specific government services will not form part of the combined entity,” read part of the statement.

The final shareholding will be determined at the closing of the transaction, but Telkom Kenya has the option of holding up to 49 per cent of that shareholding.

The merged company will be chaired by Telkom Kenya Limited CEO, Mugo Kibati while Airtel Networks Kenya Chief Executive, Prasanta Sarma, will be appointed Chief Executive Officer.

“Airtel Kenya and Telkom Kenya will see no immediate changes to their operations which will continue as usual. Similarly, there will also be no change to the current respective leadership and management, legal, organisational and staffing structures,” read part of the statement.

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.

The combined entity will see sustained investments in networks to further accelerate rollout of future technologies. The Enterprise and Carrier Services businesses will get a boost with a larger fibre footprint and increased number of enterprise customers – including both large corporations and SMEs who would have access to a diverse portfolio of world-class solutions.

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

National Treasury Cabinet Secretary, Henry Rotich, said the merger is aligned with the government’s agenda to optimise the value of the assets that it holds in trust, on behalf of Kenyans.

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“Such mergers have had positive impact on the development of the sector and service levels to consumers in other markets. Similarly, 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, thereby spurring national production to meet the growing demand locally and beyond,” said ICT Cabinet Secretary, Joe Mucheru.

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