Despite past issues with misappropriation, Kenya okays Airtel-Telkom merger

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December 16, 2019
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2 min read

The Competition Authority of Kenya (CAK) has given the go ahead for the merger of Airtel Kenya and Telkom after months of roadblocks.

Plans for the merger include naming the merged entity Airtel-Telkom, as well as numerous conditions the company is required to fulfill on behalf of its employees and existing government contracts, amongst others.

The real estate portfolio of mostly government-owned Telkom Kenya does not form part of the merger agreement.

"The merged entity shall ensure that at least three hundred and forty nine (349) of the six hundred and seventy four (674) employees of the target are retained as follows:

(a) 120 employees by the merged entity for a period of two years from the date of the implementation of the merger;

(b) 114 employees by Telkom Kenya Limited for a period of two (2) years from the date of the implementation of the merger; and

(c) 115 employees to be absorbed by the network partners of the merged entity," CAK boss Wang'ombe Kariuki said.

In the recent past, the Kenyan government investigated alleged misappropriation of public funds at Telkom during the course of negotiations for the merger to occur.

airtel telkom
Telkom Kenya CEO Mugo Kibati (left) and Airtel Kenya CEO Prasanta Das Sarma.

In addition to the above requirements, Airtel-Telkom is not permitted to transfer, in any way, parts of its operating and frequency spectrum licences until said licences expire. The frequency spectrum previously acquired by Telkom “shall revert back to the Government of Kenya (GoK).”

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The GoK does intend to keep its eye on the merged entity for the next five years. This condition also includes a forensic audit where the government sees any indication of the entity failing as part of the merger deal.

 

Image courtesy - The East African


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