It is a sigh of relief for Airtel and Telkom Kenya after the Competition Tribunal allowed them to sell up to 40% of their merged business.
In February this year, the merger hit a wall after the two companies filed an application with the Competition Tribunal to protest the terms imposed by the Competition Authority of Kenya (CAK).
The merger terms they opposed were:
- The merged entity should retain all workers for two years
- The companies should not sell any assets of the resultant entity within the first five years
- The entity should not sell the four frequency spectrum licences and five operating licences including a submarine cable landing licence.
- Spectrum resources owned by Telkom to revert to the State
Aside from allowing the sale of the business, the Tribunal dropped CAK control over the licenses, allowing the two firms to continue trading in the permits in line with conditions imposed by the Communication Authority of Kenya (CA).
However, the Tribunal maintained that although the merged entity can offer new shares to third parties in efforts to raise fresh capital, it cannot be bought off.
Still, the merged entity cannot sell sections of its business to a firm that controls more than 40% of Kenya’s voice or internet market.
Furthermore, the tribunal maintained the job protection clause, insisting that both firms shall be required to ensure at least 349 of the 674 employees are retained. Thereafter, the merged entity will be required to retain 120 employees for two years from the date of the implementation of the merger, while 114 employees by Telkom Kenya will be retained for two years after the deal.
Another 115 employees will be absorbed by the network partners of the merged entity
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