Safaricom shareholders approve yuMobile acquisition
18 September 2014 |
Shareholders at Kenya’s Safaricom have officially approved the company’s joint acquisition, with Bharti Airtel, of YuMobile.
The $120 million deal was approved by shareholders at Safaricom’s annual general meeting earlier this week, on the condition that it will not affect their dividend payout.
Safaricom and Bharti Airtel are to acquire yuMobile from Essar Telecom with the former acquiring the majority of its infrastructure, and the latter taking on yuMobile’s 2.55 million subscribers.
As well as ensuring shareholder dividends were not affected, Safaricom chairman, Nicholas Ng’ang’a, said: “The acquisition will provide us with much needed frequency spectrum that will enable us to accommodate more customers and roll out new services.”
Bob Collymore, CEO at Safaricom, said that the lack of frequency has been a long-standing problem for the company, and that the acquisition was part of a strategic network improvement scheme.
“We have a disproportionately small amount of spectrum relative to our competitors given that we serve 22 million customers compared to our competitors who have less than 6 million customers,” Collymore said.
“The addition to the current spectrum will result in a marked improvement in quality of service on the Safaricom network. It will also pave the way for the introduction of 4G LTE services which will provide faster internet for our customers.”
Ng’ang’a said that Safaricom would finance the deal from its cash reserves and it will not change the existing shareholder dividend of 47 cents per share.
The deal is still subject to regulatory approval.