Vodafone Kenya has received approval from the Capital Markets Authority (CMA) to proceed with its planned purchase of an additional 15% stake in Safaricom, after the regulator exempted the company from the requirement to make a mandatory takeover bid to minority shareholders.
The exemption clears a significant regulatory obstacle in the KSh 204.3 billion deal, which will see Vodafone Kenya acquire 6.01 billion Safaricom shares from the Government of Kenya at KSh 34 per share.
Upon completion of the transaction, Vodafone Kenya’s ownership in Safaricom will rise from 40% to 55%, cementing its position as the majority shareholder. Meanwhile, the Government’s stake will reduce to 20%, with the remaining 25% continuing to be held by public investors.
In addition to the share acquisition, Vodafone Kenya has agreed to pay the Government KSh 40.2 billion upfront for the rights to future dividends linked to the state’s remaining 20% shareholding.
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Ordinarily, Kenya’s Capital Markets (Take-overs and Mergers) Regulations require any investor acquiring effective control of a listed company to make an offer to purchase shares from all other shareholders. However, Vodafone Kenya successfully argued that the transaction is a negotiated transfer between existing shareholders and forms part of an internal restructuring within the Vodafone Group, rather than a traditional takeover.
The Government share acquisition is also tied to a separate corporate restructuring in which Vodacom Group will purchase Vodafone International Holdings B.V.’s remaining 12.5% stake in Vodafone Kenya. Once that process is complete, Vodacom will own Vodafone Kenya outright, giving it indirect control of about 55% of Safaricom.
Although the CMA has granted its approval, the transaction has yet to be finalised. Completion remains subject to several outstanding conditions, including competition and sector-specific regulatory approvals across the relevant jurisdictions.
