Bharti Airtel announced it will merge its operations in Kenya with Telkom Kenya, stepping up competition with Safaricom and boosting its African unit’s value ahead of a planned IPO later this year.
In a statement announcing the merger, the India-based operator said its Airtel Kenya subsidiary signed an agreement with Telkom Kenya to merge their respective mobile, enterprise and carrier services businesses to create a new joint entity, Airtel Telkom.
No financial details were disclosed and finalisation of the deal is subject to regulatory approval.
The announcement follows a long period of uncertainty whether the merger would go ahead.
Airtel abandoned talks over the deal in June 2018 following two months of negotiations, after the two companies reportedly disagreed on a number of issues including future investment plans.
However, Reuters reported last month that talks had been revived.
Telkom Kenya is 60 per cent owed by London-based Helios Investment Partners, which was reportedly looking for a cash out. The rest of the company is owned by the Kenyan government.
The deal is also likely improve the overall valuation of Airtel Africa, ahead of Airtel’s planned IPO of the unit, likely to held in May or June. In 2018, the company raised $1.25 billion to support the business.
Airtel said the two companies plan to combine their operations in Kenya and establish “an entity with enhanced scale, operational efficiency and strategic brand presence”.
In addition, the combined company plans to jointly invest in networks “to further accelerate rollout of future technologies”.
It will also provide a boost for both operators’ enterprise and carrier businesses, providing a larger fibre footprint and a bigger portfolio of enterprise customers.
GSMA Intelligence forecasts Airtel Kenya and Telkom Kenya will have a combined 16.2 million connections by the end of the current quarter, behind Safaricom’s 32.3 million.