France Telecom, the majority owner of Telkom Kenya, has gone on an acquisition spree of African telcos barely three months after announcing its exit from the Kenyan market.
The French firm known by the trade name Orange on Thursday announced that it has signed an agreement with Bharti Airtel to acquire Airtel’s operations in Burkina Faso and Sierra Leone.
This follows another Tuesday announcement that it had entered into an agreement with Cellcom Telecommunications to acquire its subsidiary in Liberia.
Orange said in Thursday’s statement that it will acquire 100 per cent of the two Airtel companies’ share capital.
In November Orange announced that it had entered into an agreement with private equity firm Helios Investment Partners to sell its 70 per cent stake in Telkom Kenya.
The firm said the consolidated revenue of the two West Africa-based companies is about 275 million euros (about Sh30.5 billion) and that the acquisitions would be implemented in partnership with Orange’s subsidiaries in the Côte d’Ivoire and Senegal.
“These acquisitions provide a clear illustration of Orange’s international development strategy, which places a priority on accelerating growth in high-potential, emerging markets where the group is not already present,” said France Telecom.
“Through this deal, Orange will reinforce its presence in Africa with two additional countries, adding almost 5.5 million customers to its mobile customer base. This acquisition marks an important step forward in Orange’s dynamic growth strategy and will bring the group’s African footprint up to 20 countries in 2016,” read the statement.
The firm added that the outlay for these transactions will be based on the financials of Airtel’s two subsidiaries for the year ended March 31, 2016 and will represent the equivalent of 7.9 times Airtel’s Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) in the two countries at present.
The completion of these transactions remains subject to approval by the respective regulatory authorities.
The agreement is further to the initial one signed between Airtel and Orange in July, 2015 regarding the potential acquisition of Airtel’s operations in Burkina Faso, Sierra Leone, Chad and Congo Brazzaville.
The agreements regarding potential transactions in the remaining two countries have lapsed.
Lazard and Société Générale were advisors to Orange for this transaction. Airtel was advised by Arma Partners LLP.