Telecom operator Bharti Airtel today said that it has signed an agreement with Millicom International Cellular S.A. to acquire 100 per cent stake in its Rwanda operation which operates under the brand name of Tigo Rwanda.
“Bharti Airtel Limited…has entered into a definitive agreement with Millicom International Cellular S.A. (Millicom) under which Airtel Rwanda Limited will acquire 100 per cent equity interest in Tigo Rwanda Limited,” Bharti Airtel said in a statement.
Under this deal, Tigo’s 370 million customers will join the network of Airtel Rwanda. The acquisition will make Airtel Rwanda the second largest operator in the country with revenues of over $80 million and a revenue market share of over 40 per cent, the statement said. According to Airtel, the acquisition would make the company number two operator in Rwanda. The deal is subject to regulatory and statutory approvals.
The consideration for the transaction is based on approximately 6x EBITDA multiple, payable over two years.
In a statement, 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. Today, it has taken a step to acquire Tigo Rwanda to become a profitable and a strong challenger in a two-player market.
According to Airtel, the existing customers of Tigo Rwanda will join Airtel’s global network.
Raghunath Mandava, MD and CEO, Airtel Africa, said, “On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side. 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.”