South African telecoms giant’s acquisition marks strategic pivot towards East African growth markets
By Our Reporter
Johannesburg – Vodacom Group has agreed to acquire a controlling 55% stake in Safaricom, Kenya’s dominant telecommunications operator, in a $2.1 billion (R36 billion) transaction that positions the South African company as the undisputed leader in one of Africa’s most dynamic digital markets.
The deal, announced on 4 December, will see Vodacom purchase a 15% stake from the Kenyan government and an additional 5% from Vodafone at KES34 per share. Upon regulatory approval from authorities in Kenya, Ethiopia and South Africa, Vodacom’s shareholding will rise from 35% to 55%, whilst Safaricom will remain listed on the Nairobi Stock Exchange.
The transaction represents a watershed moment in African telecommunications consolidation and underscores the growing importance of mobile money and fintech services in emerging markets. Safaricom’s M-Pesa platform has become synonymous with mobile financial services across East Africa, processing billions of dollars in transactions annually.
For Vodacom, the acquisition is central to its Vision2030 strategy, which prioritises deepening market leadership in high-growth African territories. The move will trigger a significant accounting shift: Safaricom’s results will transition from associate accounting to full consolidation under International Financial Reporting Standards, pushing Vodacom Group’s revenue towards R220 billion.
“This landmark transaction will mark a pivotal step in Vodacom’s journey to accelerate growth and deepens our impact across Africa,” said Shameel Joosub, Vodacom’s chief executive. He emphasised that the controlling stake would unlock new opportunities to drive digital and financial inclusion across Kenya and Ethiopia, where Safaricom has been expanding operations.
The Kenyan government’s decision to divest reflects a broader policy shift towards mobilising capital without increasing taxation or national debt. John Mbadi, Cabinet Secretary for The National Treasury and Economic Planning, characterised the sale as part of President William Ruto’s agenda to unlock capital for infrastructure investment. The government will retain a 20% stake and board representation.
Safaricom chief executive Peter Ndegwa welcomed Vodacom’s increased commitment, describing the South African group as “a trusted partner in Safaricom’s journey from the very beginning”. The Kenyan operator has consistently delivered strong financial performance, maintaining industry-leading margins whilst expanding its portfolio beyond traditional telecommunications into cloud computing, Internet of Things services and enterprise solutions.
The transaction’s strategic logic extends beyond Kenya’s borders. Safaricom’s entry into Ethiopia, one of Africa’s last major untapped telecommunications markets, presents significant growth potential despite initial operational challenges in the politically complex Horn of Africa nation. The expanded partnership with Vodacom could provide additional resources and expertise to accelerate that expansion.
For investors, the deal signals Vodacom’s confidence in Safaricom’s ability to sustain growth trajectories that have historically outpaced regional peers. However, the acquisition also concentrates risk, tying a substantial portion of Vodacom’s future performance to political and regulatory dynamics in Kenya and Ethiopia.
The transaction remains subject to approvals from multiple regulatory bodies, with completion expected in the coming months. Industry observers will be watching closely to see whether Vodacom can replicate Safaricom’s success formula across its broader African footprint.
