Essar Capital, part of India’s Essar conglomerate, said it has reached binding agreements worth a total of $120 million (€91 million) with Safaricom and Bharti Airtel on the sale of its telecoms business in Kenya, where it sells mobile services under the yuMobile or yu brand.

Essar Capital said Safaricom will take over Essar Telecom Kenya’s network, IT and office infrastructure while Airtel will acquire the company’s around 2.55 million subscribers. The fund manager said the transaction has received conditional approval from the Communication Authority (CA) in Kenya, and will now be filed with the Competition Authority of Kenya (CAK) for approval.

Essar Capital added that it expects the transaction to conclude during the fourth quarter of 2014, noting that yuMobile will continue to operate and serve customers in the meantime. yuMobile CEO Madhur Taneja also said that Safaricom and Airtel would take over almost 90 per cent of yuMobile’s employees.

yuMobile in March revealed plans to wind up the company and sell its infrastructure and subscribers to Safaricom and Airtel respectively. While the Airtel side of the deal progressed, Safaricom took issue with some of the approval conditions proposed by the Competition Authority of Kenya (CAK) and pulled out of the negotiations.

However, Safaricom re-entered the process at the beginning of August and said it expected to complete the acquisition within the next few months, according to comments by Safaricom CEO Bob Collymore that were reported by ITWeb Africa. Later in August, it was reported that the company was prepared to pay 10.5 billion shillings (€90.5 million) for the assets.

For Essar, the transaction continues its strategy of divesting its global telecoms portfolio. The sale of yuMobile to its two rivals will also cut the number of operators in the country from four to three.

According to the CA's most recent statistics, Kenya had 31.2 million mobile subscriptions at the end of March.

Safaricom commanded a 67.8% share of the market at that date, followed by Airtel with 16.5%. Third-placed yu had an 8% share while fourth-placed Telkom Kenya – owned by Orange – had 7.7%.