Bharti Airtel Limited said it has agreed to acquire 100% of Tigo Rwanda Limited, the local unit of Millicom International Cellular S.A..
Airtel already has operations in Rwanda and the acquisition “will consolidate the Rwandan telecom market and position Airtel as a strong number 2 operator in Rwanda,” it said.
The consideration for the transaction is based on approximately six times the company’s operating profit (EBITDA), payable over two years.
“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,” said Sunil Bharti Mittal, Chairman, Bharti Airtel.
“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.
“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,” he added.
The agreement aims to bring together the strengths of Airtel and Millicom and offer a wider network, the companies said.
The existing customers of Tigo Rwanda will join Airtel’s global network, which currently serves over 370 million customers across 17 countries.
They can now get roaming rates across Africa and South Asia, it said.
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.
Airtel has been rejigging its Africa portfolio, getting rid of some operations and acquiring others.
In the past, Airtel acquired assets in Uganda (Warid) and Congo B (Warid), Kenya (yu Mobile) and consolidated operations in Ghana (Millicom).