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Essar Telecom Acquisition Regulations Give Safaricom Cold Feet

Essar Telecom Acquisition Regulations Give Safaricom Cold Feet

From Business Week

Safaricom Ltd, East Africa’s biggest mobile-phone company, said it may abandon its bid to acquire assets owned by Essar Telecom Kenya Ltd in the absence of regulatory clearance.

A month after the Nairobi-based company requested clearance from the communications authority of Kenya to make the acquisition, the regulator has yet to acknowledge receipt of the application, corporate affairs director Nzioka Waita said in an interview in the city.

CAK director-general Francis Wangusi declined to comment when Bloomberg called him on Tuesday and didn’t immediately respond to emailed questions.

For all concerned, this transaction was very time-bound, Waita said on 24 March. We are giving very serious consideration to pulling out for the simple reason that the lack of regulatory certainty puts us in a place where the key fundamentals of the transaction have changed.

Safaricom, 40% owned by Vodafone Plc., and rival Airtel Kenya Ltd may spend in the hundreds of millions of dollars acquiring Essar, which operates Kenya’s third biggest mobile company, according to Waita. Safaricom plans to buy Essar’s network base stations and transmission equipment. The regulator has demanded that Safaricom improve its network quality before being granted a new license. Airtel, the second biggest operator, is set to take over Essar’s 2.75 million subscribers and licenses.

Read more at Business Week