If it goes through, Helios Investment, a London based firm that owns 60 per cent stake at Telkom will relinquish 20 percent of its shareholding to enable Airtel buy out 50 percent stake.
The government, which now holds 40 percent stake at Telkom will shrink its shareholding to 10 percent.
“It is common practice within the ICT industry to conduct exploratory conversations; to assess the market for areas of synergy, co-operation and partnership, with the intent of giving customers greater value and superior experience,” said Telkom CEO Mugo Kibati as quoted by a local daily.
The Competition Authority, which approves such mergers and takeovers as per the law is yet to receive official communication of such transactions.
This is despite Bharti Airtel chairperson Sunil Mittal having been in the country since Saturday January 12, 2019, and holding talks with President Uhuru Kenyatta.
Sunil arrived in Kenya on a private jet through JKIA and was quickly whisked into a meeting with President Uhuru Kenyatta who also sneaked into Nairobi through the Madaraka SGR Train Service.
The two firms will be seeking to solidify their footing in the telecommunication industry by merging their market share of 22.3 per cent (Airtel) and nine per cent (Telkom).
This will see them enjoy a 31.3 percent market share against Safaricom’s 64.2 percent.
Read: Bharti’s Sunil Mittal in Kenya to Oversee the Telkom and Airtel Kenya Merger
This comes at a time when the regulator is set to release dominance report which could shape the future of the industry. Smaller telecommunication companies wanted Safaricom declared a dominant player and forced to share it infrastructure with others.
The two telcos could have sensed a defeat in the report, opting to combine efferts to fight off Safaricom which enjoys majority subscribers.
Recently, the parent company for Airtel Kenya, Bharti Airtel ceded part of its shareholding in Airtel Tanzania to the Tanzanian government.
It is reported that after concluding the talks in Tanzania, Bharti Airtel chairperson Sunil Mittal jetted in the country to lead the merger talks.
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