The $39 billion Essar Group today said it exited from Essar Telecom Kenya that operates under the yuMobile brand, by selling to Safaricom and Airtel Africa for $120 million.
The divestment completes the exit of Essar Group from the telecom business. Earlier, Ruias-owned Essar exited from Vodafone India, a leading telecom operator in India.
Around 10 percent of yuMobile employees will lose job, while close to 90 percent of yuMobile’s staff will be absorbed by Safaricom and Airtel.
As per the deal announced on Saturday, Safaricom will buy network, IT & office infrastructure of Essar Telecom Kenya, while Airtel will acquire yuMobile 2.7 million subscribers.
yuMobile will continue to operate and serve customers offering uninterrupted services.
yuMobile CEO Madhur Taneja said: “We have structured the transaction such that our customers will not need to change their mobile numbers or sim cards, post this transaction.”
The transaction has received approval from the Communication Authority (CA) in Kenya, subject to all parties involved in the transaction meeting certain pre-conditions.
The transaction will be filed with the Competition Authority of Kenya (CAK) for approval. Essar Capital expects the transaction to conclude during the fourth quarter of 2014.
The divestment of Essar Telecom Kenya represents Essar’s second significant exit in the last few months, following the sale in July of its US-based outsourcing company, Aegis US, to Teleperformance for S$ 610 million.
With over 20 million subscribers and an estimated market share of 67 percent, Safaricom has the widest mobile network coverage in Kenya.
Safaricom’s M-PESA has over 17 million subscribers, supported by a agent network of over 79,000 outlets. M-PESA is the world’s most developed biggest mobile payment system.
Safaricom has approximately 3,000 base stations across the country.