Vodacom takes 55% control of Safaricom in 204 billion KES government divestiture

Vodacom Group has concluded Kenya's largest corporate transaction in history. The company completed the acquisition of the remaining 15% stake from the National Treasury for 204.3 billion KES. 

This agreement lifts Vodacom's shareholding in Safaricom from 35% to 55%, combining a 15% purchase from the Government of Kenya with a 5% internal transfer from Vodafone Group Plc.  

For market participants, the deal highlights how significant corporate events can impact trading volumes on the Nairobi Securities Exchange (NSE) and investor sentiment. 

How was the Vodacom Safaricom stake acquisition done? 

The deal comes after Vodacom signaled interest in boosting its Safaricom stake in December 2025. The Vodacom Safaricom stake acquisition was made up of two parts, including: 

• A 15% stake purchased directly from the Government of Kenya through a block trade on the Nairobi Securities Exchange
• A further 5% acquired from Vodafone Group Plc (proceeds go to Vodafone directly)

Both transactions are valued at approximately 2.1 billion USD combined. The 15% purchase from the Government of Kenya covered 6.01 billion ordinary shares at 34 KES per share, totalling 204.3 billion KES. The separate 5% transfer from Vodafone Group Plc was valued at approximately 68 billion KES.

The combined 20% stake puts Safaricom on the balance sheets of both Vodacom and Vodafone under IFRS, as a fully consolidated subsidiary.

The shareholding has been restructured, with Vodacom as the majority shareholder at 55%, the Kenyan government holding 20%, and public investors holding the remaining 25%.

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What were the problems with the Vodacom Safaricom stake acquisition? 

The deal has withstood two court injunctions and seven months of regulatory clearances since the government first announced it in December 2025. 

High Court Judge Lawrence Mugambi first stopped the sale in March after journalist Tony Gachoka and Professor Frederick Ogola filed a constitutional petition. In the petition, the petitioners argued that the government violated constitutional requirements governing the sale of public assets and that the government had undervalued the shares 

“This transaction involves a strategic national asset touching on telecommunications, mobile money, data sovereignty and national security. Its disposal has been undertaken in an opaque, rushed and non-competitive manner, without public participation,” said Gachoka in his supporting affidavit. 

“Safaricom’s intrinsic value is between 70 KES and 80 KES per share. Selling at 34 KES per share exposes the country to a potential loss of approximately 250 billion KES,” he added. 

Despite Parliament adopting a joint report by the Departmental Committee on Finance and National Planning and the Public Debt and Privatisation Committee, clearing the government to carry on with the sale, the High Court still halted the proposed transaction. 

However, the Court of Appeal later lifted the sale’s suspension, ruling that the government had met the legal threshold to obtain a stay and that public interest considerations supported lifting the suspension. 

Having fully and thoroughly considered this application, we come to the conclusion that it satisfies the two limbs of arguability and nugatory (meaningless), and that the public interest compellingly demands that the stay sought be granted. We accordingly grant it,” the three-man panel ruled.

The Capital Markets Authority subsequently exempted Vodafone Kenya from the takeover offer requirement as per Regulation 5(1) of the Capital Markets (Take-overs and Mergers) Regulations, 2002, after the legal issues were resolved. 

Under the exemption, the transaction closed without requiring a compulsory offer for all members of the company. It removed the possibility of Safaricom's removal from the Nairobi Securities Exchange. 

How does the government plan to use the proceeds? 

With the close of the Kenyan government’s Safaricom divestiture, the government's total cash take is about 244.5 billion KES. That is 204.3 billion KES from the share sale plus a 40.2 billion KES upfront payment. 

The upfront payment is an advance on future dividends; instead of collecting annual dividends on its remaining 20% stake, the government accepted a lump sum financed by Vodacom against future payouts. 

With the lump sum payment received now, the government will not receive Safaricom dividends for the next two to three years.  

The Kenyan government has plans to channel its proceeds into a National Infrastructure Fund and a Sovereign Wealth Fund. Both funds will pay for roads, energy, water, and airports as part of the government’s long-term development agenda.

How did the Vodacom Safaricom stake acquisition affect the market?

In June, when the deal was closed, the NASI index rose 9.0% as the Nairobi Securities Exchange ended the month on a bullish note. 

NSE benchmark indices, including the N10, NSE 20, and NSE 25, advanced by 11.8%, 6.9%, and 9.7%, respectively, in June. Because of the block trade, Safaricom accounted for 82.3% of total quarterly trading activity across Q2. Excluding that single transaction, Safaricom's share of quarterly turnover was 21.2%, ranking it second behind Equity Group at 29.8%.

The foreign exchange aspect of this deal also carries potential macroeconomic implications. The USD inflows are one of the largest single foreign exchange events in Kenya's recent fiscal history. 

This forex inflow could provide the Central Bank of Kenya's dollar reserves with a buffer and ease near-term pressure on the shilling, although macroeconomic conditions remain the dominant driver. 

USDZAR can provide regional context for how the US dollar performed against a major African emerging-market currency during the Safaricom transaction period.

What should traders know? 

For market participants, the Kenyan government's Safaricom divestiture shows that Kenya's capital market infrastructure can support large institutional transactions involving strategic assets. 

Completing the trade, securing regulatory approvals, and resolving the legal challenges may strengthen investor confidence in Kenya's market framework. 

The transaction also reinforces the importance of the Nairobi Securities Exchange and Safaricom shares within the equity market. Safaricom remains one of the largest listed companies by market capitalization, so changes affecting the company often affect Kenyan equities.

While a single transaction does not determine the NSE’s long-term direction, it may contribute to visibility among international portfolio managers looking for opportunities across African stock markets.

Conclusion 

The Vodacom Safaricom stake acquisition represents a fundamental shift in Kenya’s telecoms industry and capital markets. Vodacom's stake is up to 55%, while the Kenyan government has completed a significant strategic divestment. 

Ownership change alone does not determine outcomes. The company's performance, the broader economic climate, and investor confidence will shape how the deal's effects unfold over the coming years.

Forex traders should recognise that corporate developments, government policy, and global market trends are connected, and monitoring these factors may provide insights into changing market conditions in Kenya.

For more information on the effects of corporate developments on the stock market, visit Exness Insights. Traders monitoring Kenyan equities and related currency pairs can learn relevant market data and analysis on the Exness Blog page.