Telkom Kenya and Airtel communication campanies have announced plans for a merger aimed at combining operations and establishing an entity with enhanced scale and efficiency in order to widen their distribution of network and products.
According to the statement released on Friday, the companies will operate under a joint venture company to be named Airtel-Telkom.
The merger means shareholdres of the two companies will be required to enter into agreement to merger their respective Mobile, Enterprise and Carrier Services business in Kenya.
The merged company (Airtel-Telkom) will be chaired by Telkom CEO, Mugo Kibati while Prasanta Sarma will be the company’s Chief Executive Officer.
The new company will also retain the staff members currently working for the two campanies in leadership, management, legal organisational structures.
The statement further clarifed that Telkom Kenya Limited’s real estate portfolio and specific government services will not be part of the merger agreement.
Treasury CS Henry Rotich said lauded the move saying it isin line with the government’s agenda to optimise value of the assetsn. his sentiments were echoed by ICT CS Joe Mucheru who said the erger will have a positive impact on the development of the communication sector and improve on the service delivery and product promotion.
“We look forward to this merger laeading to introduction of of new technologies and telecommunication products which will, in turn, support the growth of other business sectors,”said Mucheru.
In the merger deal, Airtel wiil be the majority shareholder with 50% while Telkom Kenya will have 40% of the shares.