South Africa’s leading mobile network operator, Vodacom Group Ltd., is set to gain majority control of Safaricom Plc, East Africa’s largest telecommunications company, in a landmark $2.4 billion transaction that is poised to reshape the region’s telecom landscape.
Under the agreement, Vodacom will purchase a 15% stake in Safaricom from the Kenyan government along with an effective 5% stake from Vodafone International Holdings BV, bringing the total transaction value to $2.1 billion. In addition, Vodacom will make an upfront payment of 5.3 billion rand ($310 million) to secure the right to future Safaricom dividends that would otherwise be payable to the Kenyan government, according to Bloomberg reports.
Following the completion of this deal, Vodacom’s total ownership in Safaricom will rise to 54.9%, giving the South African telecom giant majority control. The purchase will be financed through loan agreements with Vodafone and an external Kenyan-shilling denominated facility guaranteed by Vodacom.
Strategic Expansion in Mobile Finance
The acquisition is seen as a strategic step to strengthen Vodacom’s presence in the mobile payments and digital finance sector. The company noted that the transaction will enhance its capabilities in mobile wallets, lending, and other digital financial services, furthering its goal of promoting financial inclusion across Africa.
Safaricom, currently valued at approximately KES 1.196 trillion ($8.8 billion), holds a dominant position in Kenya’s telecommunications market, serving around 60% of mobile subscribers. The company has continued to report strong performance, with revenue for the six months ending September rising 11.1% to KES 199.9 billion ($1.4 billion), reflecting robust market demand.
Regulatory Approvals and Investor Advisory
The deal remains subject to a series of regulatory approvals from multiple authorities, including Kenya’s Cabinet, National Assembly, Communications Authority, Capital Markets Authority, Central Bank of Kenya, COMESA Competition Commission, and the East African Community Competition Authority. Safaricom has advised investors to exercise caution when trading its shares until the approvals are finalized to ensure compliance and market stability.
This strategic acquisition not only reinforces Vodacom’s footprint in East Africa but also positions it as a leading player in the digital financial services and telecom sectors, unlocking opportunities for regional growth and innovation in mobile payments and connectivity.
