Vodacom Group is significantly strengthening its grip on the high-growth East African market, announcing a massive $2.1 billion (R36 billion) deal to acquire a controlling interest in Safaricom.
The Big Picture
Vodacom, a leading pan-African telecommunications group, is increasing its shareholding in Safaricom to deepen its leadership in the region, a core pillar of its Vision 2030 strategy.
- The Deal: Vodacom has agreed to purchase 15% of Safaricom from the Government of Kenya and an additional 5% from Vodafone at KES34 per share.
- The Result: If approved by regulators in Kenya, Ethiopia, and South Africa, Vodacom’s stake in the Nairobi Stock Exchange-listed Safaricom will increase from 35% to 55%, giving it a controlling interest.
- Financial Impact: Under International Financial Reporting Standards (IFRS), Safaricom’s financial results will transition from an associate basis to being fully consolidated, pushing Vodacom Group’s revenue toward R220 billion.
Why it Matters
Safaricom is widely considered one of Africa’s most attractive assets, thanks to its blend of telecommunications, fintech, and technology services, coupled with robust financial performance.
- High-Growth Asset: Safaricom leverages the hugely successful M-Pesa platform in Kenya, which drives high-growth fintech revenue.
- Expansion Engine: The company is well-positioned for further growth through its expansion into Ethiopia and a growing suite of cloud, IoT, and enterprise services.
- Vodacom CEO Shameel Joosub: He called the deal a “pivotal step in Vodacom’s journey to accelerate growth,” emphasizing that acquiring a controlling stake “unlocks new opportunities to drive digital and financial inclusion at scale in Kenya and Ethiopia.”
Zoom In
- Safaricom CEO Peter Ndegwa welcomed the move, noting that Vodacom’s continued investment is “a testament to the strength of our people, our strategy, and the opportunities ahead.”
- Government of Kenya’s Perspective: Hon. John Mbadi, Cabinet Secretary for The National Treasury, stated the transaction is a key step in the President’s agenda to “innovatively unlocking capital, without increasing taxes or the countries debt burden,” while the Government retains a 20% stake and board representation.
This move solidifies Vodacom’s vision to convert scale and strategic investments into sustainable value, cementing its long-term commitment to Africa’s digital future.
