Kenya has agreed to sell a 15% stake in Safaricom to South Africa’s Vodacom in a deal valued at about US$1.6 billion, marking one of the most significant state divestments in recent years. The move forms part of President William Ruto’s wider plan to ease the country’s strained public finances by raising revenue through the sale of selected state assets.
Safaricom announced the transaction late on Wednesday, confirming that Vodacom will pay 34 shillings per share. This represents a 20% premium on the share price at the close of trading, which stood at 28.20 shillings. The purchase will raise Vodacom’s interest in Safaricom from 39.9% to 55%, giving the South African operator effective control of Kenya’s most valuable company.
Safaricom is the largest firm on the Nairobi Securities Exchange and is responsible for a substantial share of daily market activity. It is best known for M Pesa, the mobile money service that has transformed Kenya’s financial landscape and remains one of the country’s most influential innovations.
The Kenyan government currently owns 35% of Safaricom. Once the deal is finalised, its holding will fall to 20%. Despite the reduced stake, the government will receive a major upfront payment, as Vodacom has also agreed to purchase the rights to future dividends on the state’s remaining shares. This will bring an immediate 40.2 billion shillings into the Treasury.
For an administration facing mounting fiscal pressure, the transaction provides much needed breathing space. Public debt remains high, and annual repayments consume around 40% of national revenues. With limited scope to increase taxes without placing further strain on citizens and businesses, the government has presented asset disposals as a practical and less disruptive way to manage its obligations.
Safaricom said Vodacom does not intend to launch a full takeover offer once the acquisition is complete. The company will apply to the Kenyan market regulator for an exemption from mandatory takeover rules. Market observers expect the request to be granted, given that the transaction involves state approval and will not dilute the rights of minority shareholders.
Safaricom’s shareholder base is composed of a broad mix of international funds and institutional investors. Holdings include HSBC, Norges Bank and Mobius, according to data compiled by LSEG. Analysts have suggested that the increased involvement of Vodacom could provide additional strategic clarity for Safaricom as it continues to expand its services across East Africa.
The deal marks a defining moment in Kenya’s effort to restructure its public finances while safeguarding key national assets. It also strengthens the long standing corporate partnership between Safaricom and Vodacom, setting the stage for a new phase in the company’s regional growth.
