Safaricom CEO Bob Collymore (right) and chairman Nicholas Ng'ang'a
during an investors briefing. Safaricom has raised the acquisition price
of yuMobile assets to Sh10.5 billion and signalled that it expects to
close the transaction in a few months. PHOTO | SALATON NJAU
By OKUTTAH MARK
In Summary
- The breakthrough comes after the Communications Authority of Kenya (CA) relaxed earlier conditions which had put the buyout on ice.
- Safaricom had earlier set a price tag of yuMobile assets at Sh8 billion.
- The joint bid for the Indian-owned Essar Group’s Kenyan operation will see Safaricom acquire yuMobile’s base stations and equipment while Airtel will acquire the 2.7 million subscribers and licences registered under the firm.
Safaricom
has raised the acquisition price of yuMobile assets to Sh10.5 billion
and signalled that it expects to close the transaction in a few months.
Safaricom chief executive Bob Collymore told Bloomberg News
the main parties to the deal; Safaricom, Airtel and yuMobile, are set
to submit an application to the competition regulator for approval of
the transaction.
The breakthrough comes after the Communications
Authority of Kenya (CA) relaxed earlier conditions which had put the
buyout on ice.
“Safaricom expects its joint acquisition of rival yuMobile to be completed within months at a cost of about $120 million,” Bloomberg News reported Wednesday quoting Mr Collymore who is in Washington DC attending the US-Africa Summit.
Safaricom had earlier set a price tag of yuMobile assets at Sh8 billion.
The joint bid for the Indian-owned Essar Group’s
Kenyan operation will see Safaricom acquire yuMobile’s base stations and
equipment while Airtel will acquire the 2.7 million subscribers and
licences registered under the firm.
The Communications Authority (CA) is reported to
have said earlier this week that it had withdrawn at least four of the
13 terms it had set for the parties before approval of the acquisition,
allowing them to proceed with the transaction.
READ: Tough options for Safaricom’s Collymore
The Business Daily could not, however, establish what informed the rise in the valuation as Madhur Taneja, yuMobile managing director, said he could not comment on the matter.
The Business Daily could not, however, establish what informed the rise in the valuation as Madhur Taneja, yuMobile managing director, said he could not comment on the matter.
The acquisition bid was first made public in March
and was expected to be sealed by end of June, but the parties termed the
13 conditions set by the communications regulator as unrealistic,
slowing the process.
Key among them was for Safaricom to open up its
mobile money network and also meet the minimum threshold on quality of
service, conditions that made the leading mobile provider threaten to
pullout of the transaction.
If successful, the transaction will see Safaricom
get extra base stations and frequencies which it needs to accommodate an
expanding customer base to help improve its quality of services besides
getting headroom to roll out more services on the available
frequencies.
Airtel Kenya on the other hand will take over 2.75
million subscribers and licenses, boosting its market share to 26.4 per
cent from the current 17.6 per cent and narrowing the gap with
Safaricom, which has 67 per market share by subscriber numbers.
Francis Wangusi, director general of CA, was quoted
saying he had revised the conditions set for approval of a plan by
Airtel and Safaricom to acquire yuMobile
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