South African giant takes control of international company for R36 billion
South Africa’s Vodacom Group has acquired a majority stake in Kenya’s Safaricom in a deal worth R36 billion.
Vodacom said that the deal reinforces the group’s commitment to the East African markets of Kenya and Ethiopia.
As per the deal, Vodacom agreed to acquire 15% from the government of Kenya and 5% from Vodafone at KES 34 per share.
This valued the deal at $2.1 billion (R36 billion). If it receives regulatory approval in South Africa, Kenya and Ethiopia, Vodacom’s stake will increase from 35% to 55%, giving it majority control.
Safaricom will stay listed on the Nairobi Stock Exchange as part of the deal.
Vodacom stated that the deal forms a key part of its Vision 2030 strategy, which includes deepening its leadership in Africa’s high-growth markets and scaling its diversified portfolio.
In line with International Financial Reporting Standards (IFRS), Safaricom’s financial results will transition from being accounted for on an associate basis to being fully consolidated.
This will increase Vodacom Group’s revenue towards R220 billion.
“This landmark transaction will mark a pivotal step in Vodacom’s journey to accelerate growth and deepen 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 unlocking new opportunities to drive digital and financial inclusion at scale in Kenya and Ethiopia.”
Joosub added that Safaricom’s outstanding track record and differentiated growth outlook perfectly complement its Vision 2030 ambitions, allowing for sustainable value generation for stakeholders.
“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,” said Peter Ndegwa, Safaricom CEO.
“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.”
A prized asset
Vodacom said that Safaricom is widely regarded as one of the most attractive assets, as it combines telecommunications, fintech and technology services.
It noted that Safaricom has consistently delivered strong financial results, with industry-leading margins and resilient cash generation.
Via its flagship platform M-Pesa in Kenya, the company drives high-growth fintech revenue.
Vodacom said that Safaricom’s expansion opportunities in Ethiopia, along with a growing suite of cloud, IoT, and enterprise services, position it for continued growth.
John Mbadi, Kenya’s Cabinet Secretary for the National Treasury and Economic Planning, stated that the transaction enables Kenya to unlock capital without increasing the nation’s debt.
The government of Kenya will continue to hold a 20% stake in Safaricom, and it will remain a strategic investment for the company.
Vodacom has acquired a majority stake in Kenya’s Safaricom as per its aim to accelerate growth and increase value generation for stakeholders.
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