Safaricom faces biggest ownership change in years: What Kenyans should expect

Safaricom shareholders have been notified of a major ownership shake-up after Vodafone Kenya Limited formally declared its intention to acquire an additional 6.009 billion ordinary shares, equivalent to 15% of Safaricom, from the Government of Kenya, in a transaction valued at more than Sh204.3 billion.

The proposed deal is part of a wider internal reorganisation of Vodafone Kenya and Vodafone Group Plc, aimed at consolidating ownership, streamlining shareholding structures, and strengthening Vodafone’s control of East Africa’s largest telecommunications company.

According to disclosures published by Safaricom PLC and Vodafone Kenya, the transaction will include three interconnected components:

1. Vodafone Kenya to buy the Government’s 15% stake

Vodafone Kenya intends to purchase the 6.009 billion GOK shares at Sh34 per share, totalling Sh204.3 billion (approx. USD 1.6 billion). 

Once acquired, Vodafone will assume effective control of 55% of Safaricom’s shareholding on an indirect basis.

2. Vodacom Group to buy Vodafone Kenya shares from Vodafone Group Plc

Vodacom, which already owns 87.5% of Vodafone Kenya, will raise its stake to 100% by purchasing Vodafone Group’s remaining shares for Sh68.1 billion (approx. USD 0.5 billion). 

This step consolidates Vodacom Group’s ownership of Vodafone Kenya and, ultimately, its indirect stake in Safaricom.

3. Vodafone Kenya to pay GOK an upfront dividend equivalent

Vodafone Kenya will also pay Sh40.2 billion to the government in exchange for rights to receive future Safaricom dividends that would have accrued to the State from its residual 20% holding.

Vodafone Kenya will basically pay the government upfront so that, going forward, Vodafone, not the Government, will collect the dividends that come from the government’s remaining 20% shares in Safaricom.

The Government will still own the 20%, but it will no longer receive the annual dividend payments from those shares. 

Although Vodafone Kenya will gain effective control of Safaricom under takeover regulations, it has applied to the Capital Markets Authority (CMA) for an exemption from being required to make a mandatory offer to other shareholders.

The company emphasised that it does not intend to take over Safaricom, and the takeover exemption is being sought to facilitate the corporate restructuring without triggering additional buy-outs.

Vodafone Group says the overhaul will simplify Safaricom’s ownership structure, create better alignment between Vodafone Kenya and Vodacom’s wider African operations, improve governance and operational efficiency, and strengthen capital allocation to support Safaricom’s long-term growth. 

Vodacom adds that the acquisition reinforces its strategy to consolidate African assets under a unified leadership and boost shareholder value.

The completion of the proposed transactions still requires approval from the Cabinet and the National Assembly, as well as clearance from the Capital Markets Authority. 

Several regulators must also review the deal, including the Communications Authority of Kenya, the Central Bank of Kenya, the EAC Competition Authority, and the COMESA Competition Commission. 

Safaricom PLC has advised shareholders and the public to exercise caution when dealing in Safaricom shares until the process is fully completed.