South Africa’s largest mobile operator, Vodacom Group Ltd., is set to take control of East Africa’s biggest telecom, Safaricom Plc, in a multi-billion-dollar deal.
Vodacom has agreed to buy a 15% stake in Safaricom from the Kenyan government, along with an effective 5% stake from Vodafone International Holdings BV, for a total of $2.1 billion.
The deal also includes an upfront payment of 5.3 billion rand ($310 million) to secure the right to future Safaricom dividends that would otherwise go to the Kenyan government, according to Bloomberg.
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The acquisition will bring Vodacom’s total stake in Safaricom to 54.9%, the company said. To fund the purchase, Vodacom will use loan agreements with Vodafone and an externally sourced Kenyan-shilling facility guaranteed by Vodacom.
Strategic move for mobile payments
“The acquisition will consolidate Vodacom’s capabilities in mobile payments, lending and digital wallets, supporting its broader financial inclusion strategy across the region,” the company said.
Safaricom, valued at about KES 1.196 trillion ($8.8 billion), dominates Kenya’s telecom market with roughly 60% of mobile subscribers. Its growth has remained strong, with revenue for the six months to September rising 11.1% to KES 199.9 billion ($1.4 billion).
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The transaction is subject to multiple regulatory approvals, including from Kenya’s Cabinet, National Assembly, Capital Markets Authority, Communications Authority, Central Bank, COMESA Competition Commission, and the East African Community Competition Authority.
Safaricom has advised investors and shareholders to exercise caution when trading its shares until all regulatory approvals are completed.
