Vodacom is waiting for requisite approvals from regulatory and governmental authorities in Kenya, Ethiopia and South Africa.
Vodacom plans to acquire a 15% shareholding in Safaricom from the Kenyan government and a 5% shareholding from Vodafone, increasing its stake to 55% for $2.1bn (about R36bn).
The telecommunication giant made the announcement on Thursday, saying the deal will reinforce Vodacom’s commitment to the East African markets of Kenya and Ethiopia.
The acquisition consideration is equivalent to 34 Kenyan shillings per Safaricom share.
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Vodacom awaiting for approvals
The telecommunications giant already owns 35% of Safaricom, which is listed on the Nairobi Stock Exchange. It added that it is waiting for requisite approvals from regulatory and governmental authorities in Kenya, Ethiopia and South Africa.
“The move is a key milestone in Vodacom’s Vision2030 strategy, which includes deepening its leadership in Africa’s high-growth markets and scaling its diversified portfolio,” Vodacom said.
“In accordance with International financial reporting standards (IFRS), Safaricom’s financial results will transition from being accounted for on an associate basis to being fully consolidated, increasing Vodacom Group’s revenue towards R220 billion.”
Vodacom’s growth acceleration
Shameel Joosub, group CEO said this transaction will strengthen their position as a market leader, while at the same time unlocks new opportunities to drive digital and financial inclusion at scale in Kenya and Ethiopia.
“Safaricom’s outstanding track record and differentiated growth outlook perfectly complement our Vision 2030 ambitions, empowering us to deliver sustainable value for all stakeholders and to connect millions more people for a better future,” he said.
“I look forward to working even closer with the Safaricom team and taking some of the learnings from their success and leveraging it across the group.”
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Trusted partner in Safaricom’s journey
Peter Ndegwa, Safaricom CEO, said the telecommunication giant has been a trusted partner in Safaricom’s journey from the very beginning. Safaricom is one of Africa’s most attractive assets, combining telecommunications, fintech and technology services.
The government of Kenya is set to retain a 20% stake in Safaricom. John Mbadi, Cabinet Secretary for National Treasury and Economic Planning in Kenya said: “This transaction is one of the first steps in the president’s stated agenda of innovatively unlocking capital, without increasing taxes or the country’s debt burden to allow additional investment in critical infrastructure to support future growth.
“Safaricom has been and continues to be, a key strategic investment for us, as we are retaining a 20% stake as well as board representation.”
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