Bharti Airtel through its subsidiaries has entered into a definitive agreement with Millicom International Cellular under which Airtel Rwanda will acquire 100 per cent equity interest in Tigo Rwanda, a company statement said in New Delhi on Tuesday.
"Airtel has taken proactive steps in Africa to consolidate and realign the market structure in the last few remaining countries where its operations are lagging on account of lower market share and presence of too many operators.
"Airtel and Tigo have already merged their operations to create a strong viable entity in Ghana. Today, it has taken yet another important step to acquire Tigo Rwanda to become a profitable and a strong challenger in a two-player market," said Sunil Bharti Mittal, Chairman, Bharti Airtel.
"We are also committed to the long-term viability of our operations in two other countries i.e. Kenya and Tanzania, to ensure that in 2018 all our 15 operations in Africa start contributing positive margins and cash flows towards a healthy and profitable Airtel Africa," he added.
The statement said the acquisition will consolidate the Rwandan telecom market and position Airtel as a strong number two operator in Rwanda.
"The consideration for the transaction is based on approximately six times Ebitda (Earnings before interest, tax, depreciation and amortization) multiple, payable over two years."
The agreement was subject to regulatory and statutory approvals.
The statement said the agreement aims to bring together the strengths of Airtel and Millicom in Rwanda and offer benefits to customers in the form of a wider network, affordable voice and data services, and superior customer care.
The existing customers of Tigo Rwanda will join Airtel's global network, which currently serves over 370 million customers across 17 countries.
They can avail amongst other things, benefits of the 'One Airtel' network with lower roaming rates across Africa and South Asia, and Airtel Money.
"The acquisition reinforces our commitment to the Rwanda market and is a significant step towards creating a stronger presence in the country.
"It will create synergies with our existing business and help boost operational efficiencies in the market. The Rwandan telecom market will significantly benefit from this acquisition, further reiterating our stand that in-market consolidations do not just help achieve better market positions but benefit customers and the industry as a whole," said Raghunath Mandava, AMD and CEO, Airtel Africa.