Vodacom snaps up 20% more of Safaricom in $2.1bn deal 

The South African telco will own 55% of Safaricom after buying further stakes from the Kenyan government and parent Vodafone

Nairobi, Kenya | DAVID THOMAS | South Africa’s Vodacom Group is to acquire 15% of Kenya’s Safaricom from the Kenyan government and an additional 5% from parent company Vodafone in a deal that takes its overall stake to 55%.

At KES34 per share ($0.26), the deal is valued at $2.1bn, subject to regulatory approval in Kenya, Ethiopia and South Africa. Safaricom will remain listed on the Nairobi Stock Exchange, while the Kenyan government retains a 20% stake and its board representation.

Safaricom operates telecommunications, fintech and technology services, and owns the widely used M-Pesa mobile money platform.

Having secured a dominant position in the Kenyan market, Safaricom has set high hopes on growth in the previously closed Ethiopian market, where it launched its mobile network in 2022. The firm also operates M-Pesa and other products in the country.

Vodacom focuses on high growth markets 

Vodacom, which is 65.1% owned by the UK’s Vodafone, said the move is a “key milestone” in its Vision2030 strategy, which focuses on Africa’s high growth markets and “scaling its diversified portfolio.”

“This landmark transaction will mark a pivotal step in Vodacom’s journey to accelerate growth and deepens our impact across Africa,” said Shameel Joosub, CEO of Vodacom Group.

“Acquiring a controlling stake in Safaricom strengthens our position as a market leader, while at the same time unlocks new opportunities to drive digital and financial inclusion at scale in Kenya and Ethiopia.

“Safaricom’s outstanding track record and differentiated growth outlook perfectly complement our Vision 2030 ambitions, empowering us to deliver sustainable value for all stakeholders and to connect millions more people for a better future.”

Peter Ndegwa, Safaricom CEO, said: “Vodacom has been a trusted partner in Safaricom’s journey from the very beginning, and we welcome their continued commitment and long-term investment in our business.

“Their confidence in Safaricom is a testament to the strength of our people, our strategy, and the opportunities ahead. We look forward to deepening our collaboration as we continue to scale innovation, expand regionally, and deliver transformative digital and financial services to our customers.”

Deal part of Kenya’s privatisation push 

Kenya’s decision to sell part of its stake in Safaricom reflects President William Ruto’s wider push to privatise state-owned companies – a plan which has previously been held up by the courts.

John Mbadi, Kenya’s cabinet secretary for the National Treasury and Economic Planning, said: “This transaction is one of the first steps in the President’s stated agenda of innovatively unlocking capital, without increasing taxes or the countries debt burden, to allow additional investment in critical infrastructure to support future growth.

“Safaricom has been, and continues to be, a key strategic investment for us, as we are retaining a 20% stake as well as board representation.”

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Source: African.Business