In a move seen as an exit strategy out of its African business and a consolidation for Airtel, Regional telco Tigo has sold its Rwandan business to Airtel, which is its third of such sale this year. Bharti has announced that it had entered into a consensus with Millicom International, which is the parent firm of Tigo Rwanda to buy its 100 per cent equity, making Airtel the only other operator in that market after MTN.
Sunil Mittal, Chairman of Bharti Airtel, said that they had resorted to consolidating their business through acquisitions in markets where the telcos operations are falling behind due to low market share and the presence of too many operators. He said, “Airtel and Tigo have merged their operations to create a strong viable entity in Ghana. In acquiring Tigo Rwanda, we aim to become a profitable and a strong challenger in a two-player market.”
The consolidation of the Rwandan business is subject to regulatory approvals from the competition authorities. It is believed that the transaction is worth six times the net earnings of Tigo Rwanda, and will be payable over the next two years. It is the sale of Millicom’s businesses in Ghana and Senegal this year that is seen as a strategic withdrawal by the South Africa-based firm.
Its Senegal business was sold off by the firm to Orange in a deal valued at $129 million in February and entered into an equal share merger agreement with Airtel Ghana in October. In February 2016, it sold its assets in the Democratic Republic of Congo to Orange for $160 million.