Wananchi Group, which owns the Zuku brand across Africa, is set to be acquired by Mauritius’ based Axian Telecom for undisclosed sum. Axian is set to buy 99.63 per cent of Wananchi Group according to filings at the Comesa Competition Commission.
Axian, owned by Hassanein Hiridjee of Madagascar operates Tigo and Zantel in Tanzania and other operations in Uganda, DR Congo, Mauritius, Madagascar and Comoros. Wananchi will be required to split its stake in satellite communications firm iSat Africa Limited. iSat Africa Ltd FZC, iSat Africa’s holding company is incorporated in the United Arab Emirates with subsidiaries in Kenya and Zambia.
AXIAN Telecom operates in nine markets through its subsidiaries and affiliates in Tanzania, Madagascar, Togo, Uganda, Democratic Republic of the Congo, Senegal, Réunion, Mayotte, and the Comoros. It provides mobile and fixed networks as well as digital infrastructure and mobile financial services. AXIAN Telecom is Africa’s 6th largest mobile operator serving around 40 million customers and is a market disruptor, having expanded through active acquisitions and heavy network investments since 2015.
Founded in 1998 by the late entrepreneur Njeri Rionge and Kenya’s former ICT Cabinet Secretary Joe Mucheru, Wananchi was the first internet service provider in Kenya under its Wananchi Online brand. A decade later it became Wananchi Group after launched into various verticals apart from just internet. In 2018, the Kenya Revenue Authority (KRA) fined the firm Ksh3.4 billion in taxes and its shareholders also had wrangles over Ksh 20 billion. Four years later, Wananchi shareholders Triple HoldCo Ltd, Liberty Global Europe 2 Ltd and Altice Africa SARL converted loans advanced to the firm and took over 75 per cent stake in the firm, edging out the firms original shareholders.
In August 2022, Triple Hold Co Limited, Liberty Global Europe 2 Limited (Liberty), and Altice Africa S.A.R.L (Altice) were granted equity shares and controlling rights of Wananchi Group by the Competition Authority of Kenya(CAK). CAK approved the conversion of their loans to Wananchi Group into equity shares and certain controlling rights.
Wananchi Online had raised several rounds of both equity and debt financing from Private Equity firms such as Liberty Global, Emerging Capital Partners, Export Development Canada, Altice, and Prudence Holdings, among others to expand its operations in Kenya, Uganda, Tanzania, Burundi, Rwanda, Somalia, South Sudan, Ethiopia, Zambia, Malawi, and Mauritius among others.
The exit for this shareholders is timely because, Zuku, which was once a dominant player in the fixed wireless internet market in Kenya was losing its grip quickly on the market and the entry of Starlink in Africa also doesn’t make it for he firm whose main business was internet.