The planned merger of Telkom Kenya and Airtel and is hanging in jeopardy as an investigation by the anti-corruption watchdog carries on beyond the completion deadline that had been agreed upon by the two companies, according to Business Daily.
They had set 27 September as the deadline by which they were to have completed negotiations and signed the agreement that they announced in February.
The Ethics and Anti-Corruption Commission (EACC) ordered regulators to suspend the merger pending the conclusion of the current investigations into how the transaction had been conceptualised, and how the Treasury had handed Telkom Kenya over to Orange, the French company that later sold its shares to the private equity fund Helios.
The Treasury has a 40 percent share in Telkom Kenya, and Helios controls the remaining 60 percent.
A source familiar with the ongoing matter predicted early last week that there was no chance the merger would happen by 27 September. He also added that there was no guarantee that Airtel would agree to a new signing date, especially with all the uncertainty of the investigations.
People involved in the negotiations have revealed that if the deadline is missed, this could very well lead Airtel to walk away from the deal entirely, weakening the two telecoms operators’ chances of challenging Safaricom’s dominance in Kenya’s market.
The sources said that a board meeting has been called where the issue of the merger will be discussed, with the hopes of negotiating new timelines with Airtel.
Source – TelecomPaper