Kenya Surrenders Control of Safaricom to South Africa’s Vodacom as Massive Takeover Closes

Vodacom has taken majority control of Safaricom after completing the acquisition of an additional stake in Kenya’s largest telco.
The deal raises Vodacom’s ownership in Safaricom to 55%, giving the South African telecommunications group control of one of the most profitable companies in East Africa. The transaction was completed days after the Court of Appeal lifted orders that had temporarily blocked the sale of the government’s 15% stake.

For Kenya, the deal brings in a major cash injection. The Treasury is expected to receive Sh204.3 billion from the sale of six billion shares at Sh34 per share. It will also receive a Sh40.2 billion advance on dividends, structured as a loan backed by the government’s remaining 20% stake in Safaricom.
But the timing also came with a trade off. Because the sale closed before Safaricom’s shareholder register closes on August 4, the Treasury will miss out on about Sh16.1 billion in final dividends from the 15% stake it has now sold.

The transaction was executed on the Nairobi Securities Exchange as a block trade, pushing daily turnover to a record Sh208.15 billion. Safaricom’s market price was not affected because the sale price was privately negotiated between Vodacom and the Treasury, with the NSE only providing the settlement platform.

The sale also fits into the government’s wider fiscal strategy. With public debt high and limited room to raise taxes, the State is increasingly looking at asset sales to raise money. Proceeds from the Safaricom stake sale are expected to support the National Infrastructure Fund, which will finance large infrastructure projects.