Vodacom has confirmed that it will buy a 35% stake in Kenya’s Safaricom for R35 billion from Vodafone in exchange for shares.
The company said that the transaction would leave Vodafone with a 5% interest, the Kenyan government with 35% stake, and public investors as well as the employee share scheme took up the remainder.
“This is an exciting occasion for Vodacom and a unique opportunity to diversify our revenue growth and profitability. 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 the close cooperation between the two businesses, particularly in driving M-Pesa adoption across our operations,” Shameel Joosub, Vodacom chief executive, said on Monday.
The transaction provided a large level of diversification in a single transaction and Safaricom was highly complementary to Vodacom Group’s existing footprint, the company said.
Safaricom is the biggest telecommunication company in east and central Africa, with more than 28 million customers, and has made a name pioneering commercial mobile money transfer through M-Pesa, which has more than 19 million users.