Telecom giant Bharti Airtel on Tuesday entered into a definitive agreement with Millicom International Cellular S.A. under which Airtel Rwanda Limited will acquire 100 percent equity interest in Tigo Rwanda Limited.
The acquisition will consolidate the Rwandan telecom market and position Airtel as a strong operator in Rwanda. The consideration for the transaction is based on approximately six times EBITDA multiple, payable over two years, and the agreement is subject to regulatory and statutory approvals.
Furthermore, existing Millicom Rwanda customers will join over 370 million customers on Airtel's global network across 17 countries and avail the benefits of a superior network, international roaming, and high quality 3G, 4G speed as well as Airtel Money services.
"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. Today, it has taken yet another important step to acquire Tigo Rwanda to become a profitable and a strong challenger in a two-player market," said chairman Bharti Airtel, Sunil Bharti Mittal.
"We are also committed to the long term viability of our operations in two other countries- 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," he added.
In the past, Airtel acquired assets in Uganda (Warid) and Congo B (Warid), Kenya (yu Mobile) and consolidated operations in Ghana (Millicom). The customers in these markets today enjoy a superior and wider network, affordable voice and data services, Airtel Money and better customer care.
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With presence across 15 African countries, Airtel is one of the largest telecom service providers across the continent in terms of geographical reach and had close to 83 million customers at the end of quarter ended September 30, 2017.
Globally, Airtel is ranked as the third largest mobile services provider in terms of customer base.
"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," said MD and CEO Airtel Africa, Raghunath Mandava.