Airtel and Telkom Kenya now have the option to sell up to 40 percent of their merged business following a ruling made by Kenya’s Competition Tribunal, which eased some regulatory orders that had prohibited any sale contracts over the next five years.
The Competition Authority of Kenya (CAK) had prohibited all share sale deals as part of its conditions for approving the Airtel and Telkom Kenya merger. The restriction caused the two telcos to appeal against the harsh conditions that were attached to their alliance.
The move was viewed as a bid by the regulator to make sure that the telcos stick to their proposal of conducting business as a combined entity and not try to use the merger as a stepping stone to various other financial deals.
Earlier this week, the tribunal maintained that the merged entity could not be bought off, but it could offer new shares to third parties in order to raise fresh capital. However, it prohibited Airtel and Telkom Kenya from selling shares of its business to a company that already controls more than 40 percent of Kenya’s internet or voice or market.
Airtel and Telkom’s combined entity in Kenya aims to create stiffer competition for Safaricom, which currently controls approximately two-thirds of the market in terms of subscribers.
Source Broadcast Media Africa