Airtel Kenya and Telkom Kenya have announced they have struck an agreement to merge the two telecommunications companies.
In a statement, the two mobile service providers say the deal will see them merge their mobile, enterprise, and carrier services to form a single joint venture named Airtel-Telkom.
“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 firms say.
The merger is, however, subject to approval from the Competition Authority of Kenya (CAK).
“The final shareholding will be determined at the closing of the transaction. Telkom Kenya has the option of holding up to 49 percent of that shareholding,” the statement reads.
Telkom Kenya CEO Mugo Kibati will be the chair of the merged company while his Airtel Kenya counterpart Prasanta Sarma will serve as the CEO.
However, Telkom Kenya’s real estate portfolio and specific government services will not form part of the combined entity under the deal.
At the moment, Airtel has a market share of 22.3 percent while Telkom has nine percent.
This means the merged company will have a market share of 33.3 percent against the market leader’s Safaricom, which holds 64.2 percent.
“Airtel Networks Kenya Limited (Airtel Kenya) and Telkom Kenya Limited (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, organizational and staffing structures,” the statement reads.