Bharti Airtel has entered into a definitive agreement with Millicom International Cellular under which Airtel Rwanda will acquire 100% equity interest in Tigo Rwanda.
The acquisition will consolidate the Rwandan telecom market and position Airtel as a strong number 2 operator in Rwanda. The consideration for the transaction is based on approximately 6x EBITDA multiple, payable over two years. The agreement is subject to regulatory and statutory approvals.
Sunil Bharti Mittal, chairman, Bharti Airtel said, “Airtel has taken proactive steps in Africa to consolidate and realign the market structure in the last few remaining countries where its operations are lagging on account of lower market share and presence of too many operators. Airtel and Tigo have already merged their operations to create a strong viable entity in Ghana. We are also committed to the long term viability of our operations in two other countries i.e. Kenya and Tanzania, to ensure that in 2018 all our 15 operations in Africa start contributing positive margins and cash flows towards a healthy and profitable Airtel Africa.”
The agreement aims to bring together the strengths of Airtel and Millicom in Rwanda and offer benefits to customers in the form of a wider network, affordable voice and data services, and superior customer care. The existing customers of Tigo Rwanda will join Airtel’s global network, which currently serves over 370 million customers across 17 countries.
Raghunath Mandava, MD and CEO, Airtel Africa said, “The acquisition reinforces our commitment to the Rwanda market and is a significant step towards creating a stronger presence in the country. It will create synergies with our existing business and help boost operational efficiencies in the market. The Rwandan telecom market will significantly benefit from this acquisition, further reiterating our stand that in-market consolidations do not just help achieve better market positions but benefit customers and the industry as a whole.”
On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position.
Over the years Airtel has been solidifying its market position to become a key player in the continent with in-country acquisitions. In the past, Airtel acquired assets in Uganda (Warid) and Congo B (Warid), Kenya (yu Mobile) and consolidated operations in Ghana (Millicom).