Airtel Kenya and Telkom Kenya have received approval from the Common Market for Eastern and Southern Africa (COMESA) Competition Commission to merge their operations, despite local anti-corruption concerns.
Business Daily reports that in August the watchdog determined that ‘the merger was not likely to substantially lessen competition in the common market or any part of it,’ due to the relatively low market shares of the merging parties and the presence of strong competitors in the relevant markets. It did note, however, that the transaction, which was agreed in February, is still obliged to comply with other applicable laws.
That same month, the planned merger between Airtel and Telkom was put on hold by the Communications Authority of Kenya (CA), pending an investigation by the Ethics and Anti-Corruption Commission (EACC) into how the deal was brokered. A separate investigation is also ongoing to establish the circumstances under which the Treasury ceded further ownership of Telkom to Orange Group, which later sold its stake to private equity fund Helios Investment Partners. TeleGeography’s GlobalComms Database states that Telkom is 60 per cent owned by Helios, with the remainder held by the government, while Bharti Airtel is the 100 per cent shareholder of Airtel Kenya.