MWC 2018 News Channel

mwc18 channel banner1 300225

Latest Comments

  • Semiu More
    Thanks Mr. Halimi. Great insight into the Africa... Friday, 08 December 2017
  • Asha Dennis More
    I am glad to know that orange is staying in the path and is... Thursday, 12 October 2017
  • Andy More
    Content is the new currency not data Sunday, 17 September 2017
  • AK More
    Please check the numbers in the article, overall market... Wednesday, 23 August 2017
  • Joey Inocentes More
    with effective adoption and implementation --- (giving... Wednesday, 09 August 2017

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.