Vodafone Acquires 15% Government Stake in Safaricom for KES 244.5 Billion

Safaricom PLC (NSE: SCOM) has announced that Vodafone Group has acquired a 15% stake from the Government of Kenya (GoK).

The transaction, valued at KES 244.5 billion, represents one of the largest single foreign direct investments in Kenya’s history. It secures the Government a massive fiscal injection while cementing Vodafone’s position as the majority shareholder in the technology giant.

Key Deal Details: A Premium Valuation

Financial analysts are calling the deal a significant “vote of confidence” in the Kenyan market. Vodafone paid KES 34.00 per share to secure the stake.

This price represents a 23.6% premium over Safaricom’s recent average market price on the Nairobi Securities Exchange (NSE), signaling Vodafone’s bullish outlook on Safaricom’s “Fintech 2.0” strategy and regional expansion into Ethiopia.

Where Will the KES 244.5 Billion Go?

Addressing concerns about how the windfall will be utilized, the Government has issued a strict “ring-fencing” policy for the proceeds.

Unlike previous privatizations where funds often plugged recurrent budget deficits (such as salaries), this capital is designated exclusively for long-term development. The funds will serve as seed capital for two critical national vehicles:

1. The National Infrastructure Fund: To finance high-priority energy, road, and water projects.

2. The Sovereign Wealth Fund: To invest in assets that generate intergenerational wealth for Kenya.

The New Ownership Structure

Following the acquisition, the shareholding structure of Safaricom PLC shifts significantly, giving Vodafone a controlling interest while retaining the state as an anchor investor.

• Vodafone Group: 55% (Up from 40%)

• Government of Kenya: 20% (Down from 35%)

• Retail/Public Investors: 25% (Unchanged)

Strategic Control & National Interest

Despite the Government reducing its holdings, the deal has been structured to protect Kenya’s strategic interests. With a retained 20% stake, the State maintains a critical voice in the boardroom, ensuring oversight on matters of national security, data protection, and the stability of the M-PESA ecosystem.

“This move ensures long-term financial stability for the Government of Kenya and positions Safaricom for accelerated future growth,” the company noted in the announcement.

The deal is expected to rally investor sentiment on the NSE, where Safaricom is the primary mover. By securing a premium price of KES 34.00, the transaction sets a new benchmark for the telco’s valuation, likely influencing trading activity in the coming weeks.