The multinational telecom company Safaricom said Kenya is selling a 15% stake worth $1.6 billion USD in the operator to South African Vodacom (VOD.J) in a bid to fill financial gaps by offloading some state assets, Reuters reported.
After the country’s high public debt, limited room to raise taxes, and annual debt repayments that absorb 40% of government revenues, President William Ruto’s administration has increasingly turned to asset sales to bolster its finances.
Safaricom, Kenya’s biggest company by market capitalization, accounts for a lion’s share of daily trading volumes on the Nairobi Securities Exchange. Vodacom, which already owns 39.9% of Safaricom through Vodafone Kenya, will pay 34 shillings per share, a 20% premium to the share’s closing price of 28.20 shillings on Wednesday. The purchase will lift Vodacom’s stake to 55%, giving the South African group effective control of Safaricom, widely known for its M-Pesa mobile money service.
Vodacom does not intend to launch a takeover offer once the acquisition is completed, Safaricom said in a statement late on Wednesday, adding that it will apply to the market regulator for an exemption.
The Kenyan government, which currently holds 35% of Safaricom, will see its stake reduced to 20%. Vodacom will also buy the rights to future dividends on the state’s remaining shares, paying the government an upfront 40.2 billion shillings, Safaricom said.
Safaricom is held by a range of offshore funds and investors including HSBC, Norges Bank and Mobius, according to LSEG-compiled data.
Safaricom officially started operating in Ethiopia through its subsidiary Safaricom Telecommunications PLC in October 2022 after acquiring a license in July 2021. The company, which is committed to investing a total of $8.5 billion USD over 10 years, provides (including 2G, 3G, and 4G) internet access and M-Pesa mobile money transfer service.
