Uncovering details in the Safaricom Sh244 billion deal cancelled by the High Court

The deal was not a sale of Safaricom itself.

The Government of Kenya agreed to sell 15% of its 35% stake in Safaricom to South Africa's Vodacom at KSh34 per share.

That amounted to about 6.01 billion shares and a direct cash payment of approximately Sh204.3 billion.

There was another component. Vodacom also paid the State Sh40.2 billion upfront for rights linked to future dividends from the government's remaining 20% stake.

Together, those proceeds were presented as a roughly Sh244.5 billion transaction for the Kenyan government.

Separately, Vodacom acquired an effective 5% interest from Vodafone, meaning its total effective holding in Safaricom rose to about 55%.

The Kenyan government remained a 20% shareholder, while the remaining 25% stayed with public investors through the Nairobi Securities Exchange.

Why did Kenya want to sell?

The government described the transaction as a partial divestiture, not an exit from Safaricom.

Treasury said the sale would unlock capital from an existing state asset and provide seed funding for the proposed National Infrastructure Fund and Sovereign Wealth Fund, reducing pressure to finance development through additional borrowing or taxation.

Parliament subsequently approved the proposed disposal after public hearings conducted across the country.

Parliamentary committees reported that hearings were held in 30 counties, with the process generating substantial public debate over valuation, national interests and the use of the proceeds.

The agreed Sh34 price was also defended by government as a fair price for the stake.

Parliamentary material cited valuation work putting Safaricom's estimated value in a range broadly around the negotiated price, although critics argued the shares were worth significantly more.

Why did the deal end up in court?

The legal challenge was not simply about whether the government should sell shares.

Petitioners questioned the constitutional and legal basis of the transaction, arguing that Safaricom was a strategic public asset and that the disposal process had not met the standards required when government makes major decisions affecting public resources.

They also challenged the transparency of the transaction, including the information disclosed about the buyer, the valuation and the arrangements surrounding the sale.

The government argued that the transaction had followed the Public Finance Management Act, received parliamentary approval and gone through public participation.

For several months, the courts issued orders stopping the sale.

Then, in June, the Court of Appeal lifted the conservatory orders, allowing the transaction to proceed while the substantive constitutional case continued.

The appellate court said the government's appeal raised substantial issues and that public-interest considerations justified lifting the freeze.

Vodacom closed the acquisition on June 30, 2026.

Why did the High Court cancel the deal?

The three-judge High Court bench has now found that the government failed on a different but fundamental question:

Whether the public had been given a meaningful opportunity to participate in the decision.

The judges held that the proposed divestiture was a public-policy decision requiring meaningful public participation by both Cabinet and Parliament.

They found that the information supplied to the public was inadequate, including information about the intended buyer, and criticised what the court described as “unexplained obscurity” surrounding material aspects of the transaction.

The court has therefore declared the government's 15% divestiture null and void and ordered that the shareholding be restored to the State, to be held on behalf of the people of Kenya.

Importantly, the ruling should not be reduced to “the court found Safaricom was sold too cheaply”.

The principal issue reported from the judgment is the legality of the process, particularly public participation and disclosure.

The Vodacom factor

Vodacom has already paid for the additional stake, the transaction has settled and its ownership rose to approximately 55%.

Vodacom said the acquisition would allow it to consolidate Safaricom as a controlled subsidiary in its accounts.

The government, meanwhile, has already received proceeds from the sale.

Treasury data later showed the Safaricom transaction had contributed significantly to the country's foreign-exchange inflows.

The judgment creates the legal direction, but the mechanics of unwinding a completed transaction of this size are considerably more complicated.

What's next with Safaricom?

For customers, the ruling does not mean Safaricom suddenly stops operating.

The company remains a listed telecommunications and financial-services business, with its network, M-Pesa platform, employees and customers continuing as normal.

The immediate uncertainty is around ownership and control.

Vodacom's entire rationale for the transaction was to obtain majority control of Safaricom.

Its 55% holding was expected to turn Safaricom from an associate investment into a consolidated business within the Vodacom Group.

The High Court ruling now puts that arrangement in doubt.

And because the decision can be appealed, today's judgment may not be the final chapter.