Airtel-Telkom Kenya Merger Handed a 5 Year Sale Agreement Restriction by Regulator

The Communication Authority of Kenya (CAK) has prevented Telkom Kenya and Airtel from selling itself or part of its unit over the next five years once the two firms have entered into the merger.

CAK watchdog however gave its greenlight for Airtel and Telkom Kenya to merge.

The two, Airtel and Telkom Kenya, announced the plan to merge their operations last year a move that saw several employees sent home.

Telkom Kenya and Airtel have now been directed not to make any new sale agreements over the next five years.

The move is seen as a bid by the regulator to ensure the telcos stick to their proposal of doing business as a combined entity and not use the merger as a stepping stone to other speculative financial deeds.

“The Competition Authority has authorized the proposed transaction as set out herein on condition that the merged entity, or part of it, is restricted from entering into any form of sale agreement within the next five years. However in the event of any indication of a failing firm within the period, the Communication Authority shall conduct a forensic audit at the cost of the merged entity,” the regulator said in a notice.

The decision means that the merged business will not be able to sell itself or part of its own units over the next five years whether or not suitors emerge.