Vodacom acquiring controlling share of Kenya's Safaricom in multi-billon deal

The Vodacom Group has announced a deal that would significantly increase its ownership in Safaricom, Kenya's leading telecom operator.

South Africa's biggest mobile operator has entered into an agreement with the Government of Kenya to acquire 15% of Safaricom PLC, and an additional 5% from Vodafone at KES34 per share.

The deal would be valued at R36 billion ($2.1 billion), and reinforces its commitment to the East African markets of Kenya and Ethiopia, Vodacom says.

If the requisite approvals come through from the relevant regulatory authorities this would see Vodacom’s stake in Safaricom increase from 35% to 55%.

Safaricom is widely regarded as one of the continent’s most attractive assets; combining telecommunications, fintech and technology services.

MyBroadband editor Jan Vermeulen highlights the value particularly of Safaricom's lucrative M-Pesa payments platform, the go-to digital payments system in Kenya.

As Vodacom points out, Safaricom drives high-growth fintech revenue through M-Pesa, while expansion opportunities in Ethiopia also position the company for growth.

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Vodacom and Safaricom have over the years made their commitment to M-Pesa clear, remarks Vermeulen.

"They're continuing to invest in the platform and expanding it... It's something Vodacom tried to replicate in South Africa, but it didn't have much success because of how mature and advanced our banking system is and was, compared to Kenya's."

Scroll up to the audio player to hear more from MyBroadband's Jan Vermeulen