Safaricom drops bid to acquire Yu assets

News Wireless Kenya 4 APR 2014
Safaricom drops bid to acquire Yu assets
Kenya operator Safaricom had withdrawn its bid to acquire assets for mobile operator Yu, after the regulator set tough conditions for the deal. CEO Bob Collymore told Business Daily that Safaricom was studying the conditions set by the Communications Authority of Kenya (CAK) for any possible avenue of going back to the transaction. He said the company would make public its decision in three weeks. 

Safaricom is specifically unhappy with the demand that it open up its M-Pesa agency network to rivals Airtel, Orange and the newly licensed mobile virtual network operators. People familiar with Safaricom's thinking on the CAK's conditions said the operator is preparing to vigorously defend M-Pesa. 

Safaricom and Airtel met 31 March with Yu to discuss the conditions the CAK set for the planned sale. Yu's CEO Madhur Taneja said parties to the transaction had identified a number of contentious issues in the CAK's 14 conditions and sought clarification that would enable them make a decision. Taneja said Airtel had particularly sought a clarification on when it should pay the USD 5.4 million fee that the CAK had set for the planned takeover of Yu assets. Airtel wants to know whether it is required to pay the amount now or wait to do so in January 2015 when its licence comes up for renewal. 

Safaricom is understood to have sought a clarification on the directive that it open up its mobile money agency network to rivals, when the matter already is pending before court. Airtel is also seeking a clarity on which licence it should cede to the regulator. 

Categories:

Mobile

Companies:

Orange,  Safaricom,  Yu,  Airtel

Countries:

Kenya

Tags:

M&A buyouts & divestments

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