The Government of Kenya has announced plans to divest a 15 per cent stake in Safaricom Plc, valued at KES 240.5 billion, as part of a broader strategy to mobilise non-tax revenue and fund national infrastructure priorities.
Transaction Overview
- Vodafone Kenya Limited (VK) will acquire 609,840,200 ordinary shares, equivalent to a 10% stake, from the Government of Kenya (GoK).
- This acquisition forms part of an internal reorganisation of Vodafone Kenya Limited.
- GoK, which has held its Safaricom stake since the 2008 IPO, will reduce its holding by 10% post-transaction, retaining a 25% strategic stake.
- VK already holds over 1.6 billion shares in Safaricom; the additional shares increase its direct stake by 10%.
- VK has sought an exemption from making a mandatory takeover offer under Regulation 4(1) of the Capital Markets (Take-overs & Mergers) Regulations, 2002, as the acquisition is a private purchase forming part of internal restructuring.
Financial and Legal Advisers
- SBG Securities and Stanbic Bank – Transaction advisers
- CDH and CMS—Legal counsel
Rationale
The transaction is designed to:
- Simplify Vodafone’s regional shareholding and governance structure
- Enhance alignment and streamline decision-making within the Vodafone/Vodacom/Safaricom group
- Support Safaricom’s long-term strategy, including capital allocation flexibility, operational efficiencies, and regional expansion
- Provide GoK with capital at a significant premium to historical cost, enabling redeployment to priority infrastructure projects
Shareholding Context (Post-Transaction)
- Vodacom Group/Vodafone affiliates (acting in concert)—~45% combined strategic stake
- Government of Kenya – 25%
- Free float (institutional & retail investors via NSE) – ~25%
No change is expected in Safaricom’s free float beyond the GoK sell-down.
Oversight and Approvals
The transaction is subject to:
- Approvals under the Capital Markets Act and Take-overs & Mergers Regulations, 2002
- Exemption by the Capital Markets Authority (CMA) from mandatory takeover requirements
- Standard corporate and government approvals
Safaricom will remain listed on the NSE, with no intention of delisting or altering its employment terms. Board composition may be realigned to reflect changes in shareholding, but day-to-day operations remain unaffected.
Government’s Position
National Treasury Cabinet Secretary FCPA John Mbadi Ng’ongo, underscored the strategic nature of the divestment:
“This is a partial divestment, and the Government will continue to retain a significant stake. The decision follows rigorous analysis, independent valuation advice, and compliance with the Public Finance Management Act. It reflects a broader national objective: mobilizing non-tax revenue responsibly to support sustainable public finances while preserving the national interest.”
He added:
“Safaricom is one of Kenya’s great success stories. Our intent in taking this step is to strengthen Safaricom’s ability to invest in the next wave of digital infrastructure and services, from 5G and fibre to fintech and regional expansion. This will benefit Kenyan consumers, businesses, and the economy.”
The CS confirmed that the divestiture will generate approximately KES 244.5 billion, representing a 23.6% premium on the six-month volume-weighted average price.
Industry Response
- Vodacom Group CEO, Shameel Joosub:
“Vodacom welcomes this development and remains fully committed to Safaricom’s long-term growth and success. Our partnership with Kenya spans over two decades, and we continue to view Safaricom as a strategically important business with strong fundamentals and significant potential.”
- Safaricom Group CEO, Peter Ndegwa:
“We appreciate the Government’s continued confidence in Safaricom and its recognition of the role we play in Kenya’s digital and economic transformation. Safaricom’s operations, leadership, and strategic direction remain strong.”
Next Steps
The proposal will undergo Cabinet and Parliamentary review, followed by regulatory approvals. The government will continue to hold a significant strategic stake in Safaricom, safeguarding national interests including data protection, cybersecurity, spectrum allocation, and payment system integrity.
“Finally, I wish to thank Vodacom for its long-term partnership. We are confident this step strengthens Kenya’s digital future, supports prudent fiscal management, and promotes deeper capital market participation,” Mbadi concluded.
Safaricom PLC Shareholding Restructure: Vodafone Kenya to Acquire 35% Government Stake
