Latest Comments

    i support ericsson as rcom can dupe anyone , they had... Sunday, 14 October 2018
  • Bud Biswas More
    Our company, Polaris Networks, has helped other smaller... Friday, 12 October 2018
  • Developing Telecoms More
    That is correct - it is the coastline of Equatorial Guinea,... Friday, 12 October 2018
  • Xavier Muñoz More
    This photo is not from São Tomé e Príncipe Thursday, 04 October 2018
  • More
    My name is Adewale. I am a Healthcare Manager in... Friday, 21 September 2018

Vodacom takes over Safaricom stake from Vodafone for $2.6B

Vodacom takes over Safaricom stake from Vodafone for $2.6B

Vodacom is obtaining a 34.94% stake in Kenya’s Safaricom from its parent firm Vodafone Group.

The ZAR35 billion ($2.6 billion) acquisition will shore up Vodacom’s East African footprint as well as allowing Vodafone Group to streamline its African holdings. If the deal receives regulatory approval, Vodafone will retain a 5% stake in Safaricom, with the remaining 35% held by the Kenyan government.

A statement from Vodacom described Safaricom as “a prized asset on the African continent”, particularly with regard to its m-Pesa mobile money platform, which has over 19 million users. Vodacom noted that taking on these customers will make it “a formidable player in financial services on the continent” with 32 million financial services subscribers.

Vodacom CEO Shameel Joosub said that the deal would allow the operator, which is 65% owned by Vodafone, to “diversify our revenue growth and profitability”. He noted that “acquiring a strategic stake in Safaricom will provide our shareholders with access to a high growth, high margin, high cash generation business operating in a high growth market. In addition to producing mutually beneficial opportunities for growth, it will create further incremental value through close cooperation between the two businesses, particularly in driving m-Pesa adoption across our operations.”

Based on Safaricom’s share prices at the close of trading of the Nairobi Securities Exchange on Friday, Vodacom will be availed of a 5.9% discount through the deal, which Joosub noted was “attractive for access to an additional 28 million customers”.

Safaricom leads the Kenyan mobile market with over 26 million connections. Its biggest rival, Airtel Kenya, trails it with over 6 million connections. In March, a report by Analysys Mason suggested that Safaricom should be forced to separate its mobile unit from M-Pesa, but Kenya’s Communications Authority did not act on the advice.

Comments powered by CComment